UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September 30, 2022~~March 31, 2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____to _____

Commission File Number: 001-40003

loanDepot, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Delaware

85-3948939

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

~~26642 Towne Centre~~6561 Irvine Center Drive,

~~Foothill Ranch,~~Irvine,

California

~~92610~~92618

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (888) 337-6888

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol

Name of each exchange

on which registered

Class A Common Stock, $0.001 per value per share

LDI

The New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

☒

Smaller reporting company

☒

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~November 9, 2022, 72,066,120~~May 10, 2023, 76,789,232 shares of the registrant’s Class A common stock, par value $0.001 per share, were outstanding. No shares of registrant’s Class B common stock were outstanding, ~~145,335,993~~144,080,314 shares of registrant’s Class C common stock were outstanding and 97,026,671 shares of registrant’s Class D common stock were outstanding.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements that are based on our management’s beliefs and assumptions and on information currently available to our management. Forward-looking statements include information concerning our possible or assumed future results of operations, business strategies, including our Vision 2025 plan, technology developments, financing and investment plans, financial condition and liquidity, dividend policy, competitive position, industry and regulatory environment, potential growth opportunities and the effects of competition. Forward-looking statements include statements that are not historical facts and can be identified by terms such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” "seek," “should,” “will,” “would” or similar expressions and the negatives of those terms.

Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Given these uncertainties, you should not place undue reliance on forward-looking statements. Also, forward-looking statements represent our management’s beliefs and assumptions only as of the date of this report. You should read this report with the understanding that our actual future results may be materially different from what we expect.

Important factors that could cause actual results to differ materially from our expectations are included in Part I, Item 2 “Management's Discussion and Analysis of Financial Condition and Results of Operations” and Part II, Item 1A "Risk Factors" in this report as well as Part I, Item 1A “Risk Factors” and Part II, Item 7 “Management's Discussion and Analysis of Financial Condition and Results of Operations” in our annual report on Form 10-K for the year ended December 31, ~~2021~~2022 filed with the Securities and Exchange Commission (“SEC”) on March ~~18, 2022.~~16, 2023.

Except as required by law, we assume no obligation to update these forward-looking statements, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

loanDepot, Inc.

Table of Contents




PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets as of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022			1
Consolidated Statements of Operations for the three months ended March 31, 2023 and ~~nine months September 30,~~ 2022 ~~and 2021~~			2
Consolidated Statements of Equity for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~			3
Consolidated Statements of Cash Flows for the ~~nine~~three months ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~			54
Notes to Consolidated Financial Statements			76
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			3630
Item 3. Quantitative and Qualitative Disclosures About Market Risk			5441
Item 4. Controls and Procedures
PART II. OTHER INFORMATION
Item 1. Legal Proceedings			5644
Item 1A. Risk Factors			5745
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			5845
Item 3. Defaults Upon Senior Securities			5845
Item 4. Mine Safety Disclosures			5845
Item 5. Other Information			5845
Item 6. Exhibits			5845
Signatures			6148

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

loanDepot, Inc.

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)


		September 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022
ASSETS	ASSETS	(Unaudited)				ASSETS	(Unaudited)
Cash and cash equivalents	Cash and cash equivalents	$	1,143,948	$	419,571	Cash and cash equivalents	$	798,119	$	863,956
Restricted cash	Restricted cash	160,926		201,025		Restricted cash	90,084		116,545
Accounts receivable, net	Accounts receivable, net	108,253		56,183		Accounts receivable, net	99,381		145,279
Loans held for sale, at fair value (includes $481,950 and $2,557,490 pledged to creditors in securitization trusts at September 30, 2022 and December 31, 2021, respectively)		2,692,820		8,136,817
Loans held for sale, at fair value (includes $506,808 and $497,574 pledged to creditors in securitization trusts at March 31, 2023 and December 31, 2022, respectively)						Loans held for sale, at fair value (includes $506,808 and $497,574 pledged to creditors in securitization trusts at March 31, 2023 and December 31, 2022, respectively)	2,039,367		2,373,427
Derivative assets, at fair value	Derivative assets, at fair value	316,647		194,665		Derivative assets, at fair value	84,624		39,411
Servicing rights, at fair value (includes $527,059 and $400,678 pledged to creditors in securitization trusts at September 30, 2022 and December 31, 2021, respectively)		2,030,026		2,006,712
Servicing rights, at fair value (includes $553,236 and $544,729 pledged to creditors in securitization trusts at March 31, 2023 and December 31, 2022, respectively)						Servicing rights, at fair value (includes $553,236 and $544,729 pledged to creditors in securitization trusts at March 31, 2023 and December 31, 2022, respectively)	2,028,788		2,037,447
Trading securities, at fair value	Trading securities, at fair value	97,210		72,874		Trading securities, at fair value	95,561		94,243
Property and equipment, net	Property and equipment, net	98,944		104,262		Property and equipment, net	88,877		92,889
Operating lease right-of-use assets	Operating lease right-of-use assets	39,480		55,646		Operating lease right-of-use assets	35,362		35,668
Prepaid expenses and other assets	Prepaid expenses and other assets	115,452		140,315		Prepaid expenses and other assets	139,904		155,982
Loans eligible for repurchase	Loans eligible for repurchase	554,892		363,373		Loans eligible for repurchase	672,458		634,677
Investments in joint ventures	Investments in joint ventures	19,938		18,553		Investments in joint ventures	18,266		20,410

Goodwill and intangible assets, net		—		42,317

Total assets	Total assets	$	7,378,536	$	11,812,313	Total assets	$	6,190,791	$	6,609,934

LIABILITIES AND EQUITY	LIABILITIES AND EQUITY					LIABILITIES AND EQUITY

Warehouse and other lines of credit	Warehouse and other lines of credit	$	2,529,436	$	7,457,199	Warehouse and other lines of credit	$	1,830,319	$	2,146,602
Accounts payable, accrued expenses and other liabilities	Accounts payable, accrued expenses and other liabilities	716,048		624,444		Accounts payable, accrued expenses and other liabilities	449,641		488,696
Derivative liabilities, at fair value	Derivative liabilities, at fair value	149,837		37,797		Derivative liabilities, at fair value	35,662		67,492
Liability for loans eligible for repurchase	Liability for loans eligible for repurchase	554,892		363,373		Liability for loans eligible for repurchase	672,458		634,677
Operating lease liability	Operating lease liability	66,122		71,932		Operating lease liability	57,837		61,675
Debt obligations, net	Debt obligations, net	2,283,704		1,628,208		Debt obligations, net	2,303,712		2,289,319
Total liabilities	Total liabilities	6,300,039		10,182,953		Total liabilities	5,349,629		5,688,461
Commitments and contingencies (Note 15)
Commitments and contingencies (Note 14)						Commitments and contingencies (Note 14)

Class A common stock, $0.001 par value, 2,500,000,000 authorized, 69,720,386 and 38,060,302 issued at September 30, 2022 and December 31, 2021, respectively		$	70	$	38
Class B common stock, $0.001 par value, 2,500,000,000 authorized, none issued at September 30, 2022 and December 31, 2021, respectively		—		—
Class C common stock, $0.001 par value, 2,500,000,000 authorized, 149,130,538 and 172,729,168 issued at September 30, 2022 and December 31, 2021, respectively		149		173
Class D common stock, $0.001 par value, 2,500,000,000 authorized, 97,026,671 and 100,822,084 issued at September 30, 2022 and December 31, 2021, respectively		97		101
Preferred stock, $0.001 par value, 50,000,000 authorized, none issued at September 30, 2022 and December 31, 2021, respectively		—		—
Treasury stock at cost, 1,744,319 and 1,593,366 shares at September 30, 2022 and December 31, 2021, respectively		(13,225)		(12,852)
Class A common stock, $0.001 par value, 2,500,000,000 authorized, 77,170,094 and 74,277,152 issued at March 31, 2023 and December 31, 2022, respectively						Class A common stock, $0.001 par value, 2,500,000,000 authorized, 77,170,094 and 74,277,152 issued at March 31, 2023 and December 31, 2022, respectively	$	77	$	74
Class B common stock, $0.001 par value, 2,500,000,000 authorized, none issued at March 31, 2023 and December 31, 2022, respectively						Class B common stock, $0.001 par value, 2,500,000,000 authorized, none issued at March 31, 2023 and December 31, 2022, respectively	—		—
Class C common stock, $0.001 par value, 2,500,000,000 authorized, 144,983,025 and 145,693,119 issued at March 31, 2023 and December 31, 2022, respectively						Class C common stock, $0.001 par value, 2,500,000,000 authorized, 144,983,025 and 145,693,119 issued at March 31, 2023 and December 31, 2022, respectively	145		146
Class D common stock, $0.001 par value, 2,500,000,000 authorized, 97,026,671 and 97,026,671 issued at March 31, 2023 and December 31, 2022, respectively						Class D common stock, $0.001 par value, 2,500,000,000 authorized, 97,026,671 and 97,026,671 issued at March 31, 2023 and December 31, 2022, respectively	97		97
Preferred stock, $0.001 par value, 50,000,000 authorized, none issued at March 31, 2023 and December 31, 2022, respectively						Preferred stock, $0.001 par value, 50,000,000 authorized, none issued at March 31, 2023 and December 31, 2022, respectively	—		—
Treasury stock at cost, 2,068,924 and 1,780,141 shares at March 31, 2023 and December 31, 2022, respectively						Treasury stock at cost, 2,068,924 and 1,780,141 shares at March 31, 2023 and December 31, 2022, respectively	(13,853)		(13,282)
Additional paid-in capital	Additional paid-in capital	778,099		565,073		Additional paid-in capital	802,251		788,601
Retained deficit	Retained deficit	(265,567)		(28,976)		Retained deficit	(384,843)		(342,137)
Noncontrolling interest	Noncontrolling interest	578,874		1,105,803		Noncontrolling interest	437,288		487,974
Total equity	Total equity	1,078,497		1,629,360		Total equity	841,162		921,473
Total liabilities and equity	Total liabilities and equity	$	7,378,536	$	11,812,313	Total liabilities and equity	$	6,190,791	$	6,609,934

See accompanying notes to the unaudited consolidated financial statements.

loanDepot, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in thousands except per share amounts)
(Unaudited)


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021		2022		2021			2023		2022

REVENUES:	REVENUES:									REVENUES:
Interest income	Interest income	$	51,202	$	71,020	$	166,888	$	187,625	Interest income	$	27,958	$	52,965
Interest expense	Interest expense	(41,408)		(56,785)		(121,220)		(165,130)		Interest expense	(26,760)		(39,889)
Net interest income	Net interest income	9,794		14,235		45,668		22,495		Net interest income	1,198		13,076

Gain on origination and sale of loans, net	Gain on origination and sale of loans, net	156,300		821,275		665,993		2,647,328		Gain on origination and sale of loans, net	108,152		363,131
Origination income, net	Origination income, net	21,268		86,601		119,449		280,824		Origination income, net	12,016		59,073
Servicing fee income	Servicing fee income	113,544		102,429		341,929		279,738		Servicing fee income	118,961		111,059
Change in fair value of servicing rights, net	Change in fair value of servicing rights, net	(38,479)		(138,462)		(140,370)		(327,194)		Change in fair value of servicing rights, net	(52,806)		(68,383)
Other income	Other income	11,765		37,678		53,472		116,487		Other income	20,380		25,355
Total net revenues	Total net revenues	274,192		923,756		1,086,141		3,019,678		Total net revenues	207,901		503,311

EXPENSES:	EXPENSES:									EXPENSES:
Personnel expense	Personnel expense	218,819		449,152		861,382		1,523,012		Personnel expense	141,027		345,993
Marketing and advertising expense	Marketing and advertising expense	42,940		131,971		205,289		355,730		Marketing and advertising expense	35,914		101,513
Direct origination expense	Direct origination expense	19,463		49,559		106,616		146,553		Direct origination expense	17,378		53,157
General and administrative expense	General and administrative expense	83,412		50,013		197,089		149,984		General and administrative expense	56,134		49,748
Occupancy expense	Occupancy expense	9,889		9,686		28,673		28,956		Occupancy expense	6,081		9,396
Depreciation and amortization	Depreciation and amortization	10,243		8,688		32,110		25,827		Depreciation and amortization	10,026		10,545
Servicing expense	Servicing expense	14,221		22,879		46,472		76,731		Servicing expense	4,834		21,511
Other interest expense	Other interest expense	36,138		22,823		83,671		57,261		Other interest expense	43,090		14,393
Goodwill impairment		—		—		40,736		—

Total expenses	Total expenses	435,125		744,771		1,602,038		2,364,054		Total expenses	314,484		606,256

(Loss) income before income taxes		(160,933)		178,985		(515,897)		655,624
Loss before income taxes										Loss before income taxes	(106,583)		(102,945)

Income tax (benefit) expense		(23,451)		24,708		(63,274)		47,210
Income tax benefit										Income tax benefit	(14,862)		(11,627)

Net (loss) income		(137,482)		154,277		(452,623)		608,414
Net loss										Net loss	(91,721)		(91,318)

Net (loss) income attributable to noncontrolling interests		(77,401)		102,802		(256,873)		503,503
Net loss attributable to noncontrolling interests										Net loss attributable to noncontrolling interests	(48,814)		(56,577)

Net (loss) income attributable to loanDepot, Inc.		$	(60,081)	$	51,475	$	(195,750)	$	104,911
Net loss attributable to loanDepot, Inc.										Net loss attributable to loanDepot, Inc.	$	(42,907)	$	(34,741)

(Loss) earnings per share:
Loss per share:										Loss per share:
Basic	Basic	$	(0.37)	$	0.40	$	(1.29)	$	0.82	Basic	$	(0.25)	$	(0.25)
Diluted	Diluted	$	(0.37)	$	0.40	$	(1.29)	$	0.82	Diluted	$	(0.25)	$	(0.25)

Weighted average shares outstanding:	Weighted average shares outstanding:									Weighted average shares outstanding:
Basic	Basic	162,464,369		130,297,565		151,803,928		127,941,331		Basic	170,809,818		139,007,890
Diluted	Diluted	162,464,369		130,297,565		151,803,928		127,941,331		Diluted	170,809,818		139,007,890

See accompanying notes to the unaudited consolidated financial statements.

loanDepot, Inc.

CONSOLIDATED STATEMENTS OF EQUITY

(Dollars in thousands)


		Common stock outstanding		Common stock $			Treasury Shares			Additional paid-in capital		Retained Deficit			Non-controlling Interests		Total Equity					Common stock outstanding												Common stock $							Treasury Shares		Additional paid-in capital			Retained Deficit		Non-controlling Interests			Total Equity
		Class A	Class C	Class D	Class A				Class C					Class D															Class A						Class C			Class D						Class C					Class D			Non-controlling Interests				Total Equity
Balance at June 30, 2021		12,541,086	181,268,155	114,978,644	$	13	$	181		$	115	$	—		$	562,658				$	(44,821)				$	1,050,688				$	1,568,834
Balance at December 31, 2021																			Balance at December 31, 2021		36,466,936										172,729,168		100,822,084			$	38			$	173	$	101		$	(12,852)	$	565,073		$	(28,976)			$	1,105,803				$	1,629,360

Deferred taxes and other tax adjustments associated with the Reorganization and IPO	Deferred taxes and other tax adjustments associated with the Reorganization and IPO	—	—	—	—		—			—		—			1,717		—						—				1,717			Deferred taxes and other tax adjustments associated with the Reorganization and IPO		—					—		—		—					—		—			—			681				—			—	681

Net issuance of common shares under stock based compensation plans	Net issuance of common shares under stock based compensation plans	5,443,128	(5,599,513)	—	7		(5)			—		(12,844)			(2)		—						—				(12,844)			Net issuance of common shares under stock based compensation plans		7,133,482					(2,038,280)		(3,795,413)		7					(2)		(4)			(163)			89,479				—			(89,479)	(162)
Dividends to Class A and Class D shareholders ($0.08 per share)	Dividends to Class A and Class D shareholders ($0.08 per share)	—	—	—	—		—			—		—			—		(4,668)						(6,095)				(10,763)			Dividends to Class A and Class D shareholders ($0.08 per share)		—					—		—		—					—		—			—			—				(5,310)			(6,442)	(11,752)
Distributions to Class C shareholders	Distributions to Class C shareholders	—	—	—	—		—			—		—			—		(6,526)						(8,517)				(15,043)			Distributions to Class C shareholders		—					—		—		—					—		—			—			—				(6,338)			(7,665)	(14,003)
Stock-based compensation	Stock-based compensation	—	—	—	—		—			—		—			1,102		—						1,495				2,597			Stock-based compensation		—					—		—		—					—		—			—			1,034				—			1,275	2,309
Distributions for taxes on behalf of shareholders, net	Distributions for taxes on behalf of shareholders, net	—	—	—	—		—			—		—			—		(13,279)						(17,332)				(30,611)			Distributions for taxes on behalf of shareholders, net		—					—		—		—					—		—			—			—				(1,786)			(2,160)	(3,946)
Net income		—	—	—	—		—			—		—			—		51,475						102,802				154,277
Balance at September 30, 2021		17,984,214	175,668,642	114,978,644	$	20	$	176		$	115	$	(12,844)		$	565,475	$	(17,819)					$	1,123,041			$	1,658,164
Net loss																			Net loss		—										—		—			—				—		—			—		—			(34,741)			(56,577)				(91,318)
Balance at March 31, 2022																			Balance at March 31, 2022		43,600,418										170,690,888		97,026,671			$	45			$	171	$	97		$	(13,015)	$	656,267		$	(77,151)		$	944,755			$	1,511,169

Balance at June 30, 2022		63,593,048	152,191,394	97,026,671	$	65	$	152		$	97	$	(13,087)		$	762,635	$	(205,235)					$	669,236			$	1,213,863
Balance at December 31, 2022																			Balance at December 31, 2022		72,497,011										145,693,119		97,026,671			$	74			$	146	$	97		$	(13,282)	$	788,601		$	(342,137)		$	487,974			$	921,473
Deferred taxes and other tax adjustments related to conversions and exchanges	Deferred taxes and other tax adjustments related to conversions and exchanges	—	—	—	—		—			—		—			(2,092)		—						—				(2,092)			Deferred taxes and other tax adjustments related to conversions and exchanges		—					—		—		—					—		—			—			5,181				—			—	5,181
Net issuance of common stock under stock-based compensation plans	Net issuance of common stock under stock-based compensation plans	4,383,019	(3,060,856)	—	5		(3)			—		(138)			15,084		—						(15,085)				(137)			Net issuance of common stock under stock-based compensation plans		2,604,159					(710,094)		—		3					(1)		—			(571)			5,265				—			(4,767)	(71)
Dividends on unvested Class A RSUs		—	—	—	—		—			—		—			—		(70)						(85)				(155)
Forfeiture of accrued distributions on unvested Class C shares		—	—	—	—		—			—		—			—		139						194				333
Forfeiture of accrued dividend equivalents on unvested Class A RSUs																			Forfeiture of accrued dividend equivalents on unvested Class A RSUs		—										—		—			—				—		—			—		—			9			12				21

Stock-based compensation	Stock-based compensation	—	—	—	—		—			—		—			2,472								2,301				4,773			Stock-based compensation		—					—		—		—					—		—			—			3,204							2,722	5,926
Distributions for taxes on behalf of shareholders, net		—	—	—	—		—			—		—			—		(320)						(286)				(606)
Refund of tax distributions, net																			Refund of tax distributions, net		—										—		—			—				—		—			—		—			192			161				353
Net loss	Net loss	—	—	—	—		—			—		—			—		(60,081)						(77,401)				(137,482)			Net loss		—					—		—		—					—		—			—			—				(42,907)			(48,814)	(91,721)
Balance at September 30, 2022		67,976,067	149,130,538	97,026,671	$	70	$	149		$	97	$	(13,225)		$	778,099	$	(265,567)					$	578,874			$	1,078,497
Balance at March 31, 2023																			Balance at March 31, 2023		75,101,170										144,983,025		97,026,671			$	77			$	145	$	97		$	(13,853)	$	802,251		$	(384,843)		$	437,288			$	841,162

See accompanying notes to the unaudited consolidated financial statements.

~~loanDepot, Inc.~~

~~CONSOLIDATED STATEMENTS OF EQUITY~~

~~(Dollars in thousands)~~

Common stock outstanding Common stock $ Treasury Stock Additional paid-in capital Retained Deficit Non-controlling Interests Total Equity
Class A Class C Class D Class A Class C Class D
Balance at December 31, 2020 — — — $ — $ — $ — $ — $ — $ — $ 1,656,613 $ 1,656,613
Distributions prior to the Reorganization — — — — — — — — — (160,617) (160,617)
Equity compensation prior to the Reorganization — — — — — — — — — 338 338
Net income prior to the Reorganization — — — — — — — — — 294,598 294,598
Deferred taxes and other tax adjustments associated with the Reorganization and IPO — — — — — — — (201,653) — — (201,653)
Effect of the Reorganization 2,215,687 181,789,329 121,368,600 2 182 121 — 740,629 — (740,934) —
Effect of the IPO 3,850,000 (2,394,000) (1,456,000) 4 (2) (2) — — — — —
Effect of the Greenshoe 577,500 (359,100) (218,400) 1 (1) — — — — — —
Net issuance of common stock under stock-based compensation plans 11,341,027 (3,367,587) (4,715,556) 13 (3) (4) (12,844) (6) — — (12,844)
Dividends to Class A and Class D shareholders ($0.77 per share) — — — — — — — — (40,730) (58,033) (98,763)
Distributions to Class C shareholders — — — — — — — — (63,023) (89,885) (152,908)
Stock-based compensation — — — — — — 26,505 — 37,506 64,011
Distributions for taxes on behalf of shareholders, net — — — — — — — (18,977) (25,450) (44,427)
Net income subsequent to the Reorganization and IPO — — — — — — — 104,911 208,905 313,816
Balance at September 30, 2021 17,984,214 175,668,642 114,978,644 $ 20 $ 176 $ 115 $ (12,844) $ 565,475 $ (17,819) $ 1,123,041 $ 1,658,164
Balance at December 31, 2021 36,466,936 172,729,168 100,822,084 $ 38 $ 173 $ 101 $ (12,852) $ 565,073 $ (28,976) $ 1,105,803 $ 1,629,360
Deferred taxes and other tax adjustments related to conversions and exchanges — — — — — — — (19,835) — — (19,835)
Net issuance of common stock under stock-based compensation plans 31,509,131 (23,598,630) (3,795,413) 32 (24) (4) (373) 227,013 — (227,017) (373)
Dividends to Class A and Class D shareholders ($0.08 per share) — — — — — — — — (5,343) (6,481) (11,824)
Distributions to Class C shareholders — — — — — — — — (6,199) (7,471) (13,670)
Stock-based compensation — — — — — — — 5,848 — 5,946 11,794
Distributions for taxes on behalf of shareholders, net — — — — — — — — (29,299) (35,033) (64,332)
Net loss — — — — — — — — (195,750) (256,873) (452,623)
Balance at September 30, 2022 67,976,067 149,130,538 97,026,671 $ 70 $ 149 $ 97 $ (13,225) $ 778,099 $ (265,567) $ 578,874 $ 1,078,497

~~See accompanying notes to the unaudited consolidated financial statements.~~

loanDepot, Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

(Unaudited)


		Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021			2023		2022
CASH FLOWS FROM OPERATING ACTIVITIES	CASH FLOWS FROM OPERATING ACTIVITIES					CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) income		$	(452,623)	$	608,414
Adjustments to reconcile net (loss) income to net
cash provided by (used in) operating activities:
Net loss						Net loss	$	(91,721)	$	(91,318)
Adjustments to reconcile net loss to net						Adjustments to reconcile net loss to net
cash provided by operating activities:						cash provided by operating activities:
Depreciation and amortization expense	Depreciation and amortization expense	32,110		25,827		Depreciation and amortization expense	10,026		10,545
Amortization of operating lease right-of-use asset	Amortization of operating lease right-of-use asset	17,107		16,932		Amortization of operating lease right-of-use asset	3,386		5,597
Amortization of debt issuance costs	Amortization of debt issuance costs	12,842		9,382		Amortization of debt issuance costs	1,855		4,195
Gain on origination and sale of loans	Gain on origination and sale of loans	(946,506)		(2,856,544)		Gain on origination and sale of loans	(43,016)		(442,771)
Gain on sale of servicing rights	Gain on sale of servicing rights	(10,548)		(1,453)		Gain on sale of servicing rights	(191)		(20,134)
Fair value change in trading securities	Fair value change in trading securities	20,196		—		Fair value change in trading securities	(2,486)		7,592
Provision for loss obligation on sold loans and servicing rights	Provision for loss obligation on sold loans and servicing rights	125,047		12,400		Provision for loss obligation on sold loans and servicing rights	9,725		23,347
(Decrease) increase in provision for deferred income taxes		(62,733)		37,269
Decrease in provision for deferred income taxes						Decrease in provision for deferred income taxes	(14,874)		(14,269)
Fair value change in derivative assets	Fair value change in derivative assets	32,223		312,586		Fair value change in derivative assets	(25,763)		(63,176)
Fair value change in derivative liabilities	Fair value change in derivative liabilities	112,040		(119,270)		Fair value change in derivative liabilities	(31,830)		75,569
Premium (paid) received on derivatives		(154,205)		4,376
Purchase of options contracts		—		(10,383)
Premium paid on derivatives						Premium paid on derivatives	(19,450)		(93,256)

Fair value change in loans held for sale	Fair value change in loans held for sale	255,716		67,010		Fair value change in loans held for sale	(38,751)		225,137
Fair value change in servicing rights	Fair value change in servicing rights	(180,136)		224,812		Fair value change in servicing rights	56,025		(121,874)
Stock-based compensation expense	Stock-based compensation expense	11,794		64,349		Stock-based compensation expense	5,926		2,309
Change in fair value of contingent consideration		—		(77)

Originations of loans	Originations of loans	(46,842,973)		(107,717,154)		Originations of loans	(4,891,247)		(21,373,625)
Proceeds from sales of loans	Proceeds from sales of loans	52,732,911		107,911,005		Proceeds from sales of loans	5,366,139		22,948,300
Proceeds from principal payments	Proceeds from principal payments	119,708		119,822		Proceeds from principal payments	15,097		60,287
Payments to investors for loan repurchases	Payments to investors for loan repurchases	(578,010)		(818,011)		Payments to investors for loan repurchases	(148,589)		(141,146)

Gain on extinguishment of debt	Gain on extinguishment of debt	(10,528)		—		Gain on extinguishment of debt	—		(10,528)
Goodwill impairment		40,736		—

Disbursements from joint ventures	Disbursements from joint ventures	8,435		8,765		Disbursements from joint ventures	3,919		922

Changes in operating assets and liabilities:						Changes in operating assets and liabilities:
Other changes in operating assets and liabilities	Other changes in operating assets and liabilities	132,310		41,105		Other changes in operating assets and liabilities	41,172		156,736
Net cash provided by (used in) operating activities		4,414,913		(2,058,838)
Net cash provided by operating activities						Net cash provided by operating activities	205,352		1,148,439

CASH FLOWS FROM INVESTING ACTIVITIES	CASH FLOWS FROM INVESTING ACTIVITIES					CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment	Purchase of property and equipment	(37,613)		(43,830)		Purchase of property and equipment	(6,275)		(14,295)
Proceeds from sale of servicing rights	Proceeds from sale of servicing rights	689,937		332,931		Proceeds from sale of servicing rights	12,029		303,777

Cash flows received on trading securities	Cash flows received on trading securities	5,894		617		Cash flows received on trading securities	1,168		1,894
Investments in joint ventures	Investments in joint ventures	(350)		(1,115)		Investments in joint ventures	—		(350)

Return of capital from joint ventures		—		189

Net cash flows provided by investing activities	Net cash flows provided by investing activities	657,868		288,792		Net cash flows provided by investing activities	6,922		291,026

See accompanying notes to the unaudited consolidated financial statements.

loanDepot, Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED

(Dollars in thousands)

(Unaudited)


		Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021			2023		2022
CASH FLOWS FROM FINANCING ACTIVITIES	CASH FLOWS FROM FINANCING ACTIVITIES					CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings on warehouse and other lines of credit	Proceeds from borrowings on warehouse and other lines of credit	$	52,089,587	$	121,009,551	Proceeds from borrowings on warehouse and other lines of credit	$	4,566,739	$	24,542,427
Repayment of borrowings on warehouse and other lines of credit	Repayment of borrowings on warehouse and other lines of credit	(57,017,350)		(119,374,838)		Repayment of borrowings on warehouse and other lines of credit	(4,883,022)		(26,192,719)

Proceeds from debt obligations	Proceeds from debt obligations	2,106,024		1,179,037		Proceeds from debt obligations	19,067		1,131,952
Payments on debt obligations	Payments on debt obligations	(1,442,931)		(477,541)		Payments on debt obligations	(6,108)		(800,092)
Payments of debt issuance costs	Payments of debt issuance costs	(4,555)		(15,839)		Payments of debt issuance costs	(14)		(3,402)
Payments for contingent consideration		—		(113)

Payments on financing lease obligation		—		(1,911)

Treasury stock purchased to net settle and withhold taxes on vested shares	Treasury stock purchased to net settle and withhold taxes on vested shares	(373)		(12,844)		Treasury stock purchased to net settle and withhold taxes on vested shares	(570)		(162)
Dividends and shareholder distributions	Dividends and shareholder distributions	(118,905)		(419,732)		Dividends and shareholder distributions	(664)		(30,230)
Net cash (used in) provided by financing activities		(4,388,503)		1,885,770
Net cash used in financing activities						Net cash used in financing activities	(304,572)		(1,352,226)

Net change in cash and cash equivalents and restricted cash	Net change in cash and cash equivalents and restricted cash	684,278		115,724		Net change in cash and cash equivalents and restricted cash	(92,298)		87,239

Cash and cash equivalents and restricted cash at beginning of the period	Cash and cash equivalents and restricted cash at beginning of the period	620,596		488,689		Cash and cash equivalents and restricted cash at beginning of the period	980,501		620,596

Cash and cash equivalents and restricted cash at end of the period	Cash and cash equivalents and restricted cash at end of the period	$	1,304,874	$	604,413	Cash and cash equivalents and restricted cash at end of the period	$	888,203	$	707,835

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for:
SUPPLEMENTAL DISCLOSURES:						SUPPLEMENTAL DISCLOSURES:
Cash paid (received) during the period for:						Cash paid (received) during the period for:
Interest	Interest	$	178,135	$	180,143	Interest	$	57,822	$	51,080
Income taxes	Income taxes	23,857		1,923		Income taxes	(3,474)		5,858

Supplemental disclosure of noncash investing and financing activities	Supplemental disclosure of noncash investing and financing activities					Supplemental disclosure of noncash investing and financing activities
Operating leases right-of-use assets obtained in exchange for lease liabilities	Operating leases right-of-use assets obtained in exchange for lease liabilities	$	14,677	$	8,501	Operating leases right-of-use assets obtained in exchange for lease liabilities	$	2,734	$	2,768
Trading securities retained in securitizations	Trading securities retained in securitizations	50,426		57,031		Trading securities retained in securitizations	—		30,076
Purchase of equipment under financing leases		—		168

See accompanying notes to the unaudited consolidated financial statements.

loanDepot, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($ are in thousands, unless otherwise indicated)

(Unaudited)

NOTE 1 – DESCRIPTION OF BUSINESS ~~PRESENTATION~~ AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying unaudited consolidated financial statements were prepared in accordance with United States generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the statements do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation were included. The results of operations for the three ~~and nine~~ months ended ~~September 30, 2022~~March 31, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2022.~~2023. For further information, refer to the consolidated financial statements and footnotes thereto included in the Annual Report of loanDepot, Inc. on Form 10-K for the year ended December 31, ~~2021~~2022 (“~~2021~~2022 Form 10-K”).

Nature of Operations

loanDepot, Inc. was incorporated in Delaware on November 6, 2020 to facilitate the initial public offering (“IPO”) of its Class A common stock and related transactions in order to carry on the business of LD Holdings Group LLC (“LD Holdings”) and its consolidated subsidiaries. loanDepot, Inc.’s common stock began trading on the New York Stock Exchange on February 11, 2021 under the ticker symbol “LDI.” loanDepot, Inc. is a holding company and its sole material asset is its equity interest in LD Holdings. As of ~~September 30, 2022~~March 31, 2023 the consolidated subsidiaries of LD Holdings included loanDepot.com, LLC, (“LDLLC”), Artemis Management LLC (“ART”), LD Settlement Services, LLC (“LDSS”), mello Holdings, LLC (“Mello”), and mello Credit Strategies LLC (“MCS”). Unless otherwise noted or indicated by the context, the term, the “Company,” refers (1) prior to the consummation of the IPO to LD Holdings and its consolidated subsidiaries, and (2) after the IPO to loanDepot, Inc. and its consolidated subsidiaries, including LD Holdings.

The Company engages in the originating, financing, selling, and servicing of residential mortgage loans, and engages in title, escrow, and settlement services for mortgage loan transactions. The Company derives income primarily from gains on the origination and sale of loans to investors, income from loan servicing, and fees charged for settlement services related to the origination and sale of loans.

Summary of Significant Accounting Policies

Our accounting policies are described below and in Note 1- Description of Business ~~Presentation~~ and Summary of Significant Accounting Policies, of our audited consolidated financial statements included in our ~~2021~~2022 Form 10-K.

Consolidation and Basis of Presentation

The Company's consolidated financial statements are prepared in accordance with ~~U.S.~~ GAAP as codified in the ~~Financial Accounting Standards Board's (“FASB”)~~FASB’s Accounting Standards Codification (“ASC” or the “Codification”). In the opinion of management, the unaudited condensed consolidated financial statements reflect all adjustments of a normal recurring nature that are necessary for a fair presentation of the results for the interim periods presented. Interim results are not necessarily indicative of results for a full year.

~~ASC 250 requires that~~loanDepot, Inc. is a change in the reporting entity or the consummation of a transaction accounted for in a manner similar to a pooling of interests, i.e., a reorganization of entities under common control, be retrospectively applied to the financial statements of all prior periods when the financial statements are issued for a period that includes the date the change in reporting entity or the transaction occurred. Prior to the IPO, the Company completed a reorganization where LLC unitsholding company, its sole material asset is its equity interest in LD Holdings ~~held by certain members (“Continuing LLC Members) were exchanged on a one-for-one basis for Class A holding units (“Holdco Units”)~~ and ~~Class C common stock.~~as the sole managing member of LD Holdings, ~~continues to be~~loanDepot, Inc. indirectly operates and controls all of LD Holdings’ business and affairs. LD Holdings is also a holding company and has no material assets other than its equity interests in its direct subsidiaries consisting of a 99.99% ownership in LDLLC (the majority asset of the group), and 100% equity ownership in ART, LDSS, Mello, and MCS. As a result of the IPO and reorganization, loanDepot, Inc. became a holding company, its sole material asset is its equity interest in LD Holdings and as the sole managing member of LD Holdings, loanDepot, Inc. indirectly operates and controls all of LD Holdings’ business and affairs. The IPO and reorganization were considered transactions between entities under common control. The financial results of LD Holdings and

its subsidiaries are consolidated with loanDepot, ~~Inc,~~Inc., and the consolidated net earnings or loss are allocated to ~~the~~ noncontrolling interest to reflect the entitlement of ~~the~~ certain members that still hold Class A holdings units (“Holdco Units”) and Class C common stock, (“Continuing LLC ~~Members.~~Members”) as of the periods presented.

The accompanying consolidated financial statements include all of the assets, liabilities, and results of operations of the Company and consolidated variable interest entities (“VIEs”) in which the Company is the primary beneficiary. VIEs are entities that have a total equity investment at risk that is insufficient to permit the entity to finance its activities without additional subordinated financial support, whose equity investors at risk lack the ability to control the entity's activities, or is structured with non-substantive voting rights. The Company evaluates its associations with VIEs, both at inception and when

there is a change in circumstance that requires reconsideration, to determine if the Company is the primary beneficiary and consolidation is required. A primary beneficiary is defined as a variable interest holder that has a controlling financial interest. A controlling financial interest requires both: (a) the power to direct the activities that most significantly impact the ~~VIEs’~~VIE’s economic performance, and (b) the obligation to absorb losses or receive benefits of a VIE that could potentially be significant to the VIE. The Company has not provided financial or other support during the periods presented to any VIE that it was not previously contractually required to provide. Other entities that the Company does not consolidate, but for which it has significant influence over operating and financial policies, are accounted for using the equity method. All intercompany accounts and transactions have been eliminated in consolidation.

Certain items in prior periods were reclassified to conform to the current presentation. To conform to the current period presentation, servicing expense on the consolidated statements of operations includes subservicing expense and in-house servicing expense.

The Company has evaluated subsequent events for recognition or disclosure through the date of this report and has not identified any recordable or disclosable events that were not already reported in these consolidated financial statements or notes thereto.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Management has made significant estimates in certain areas, including determining the fair value of loans held for sale, servicing rights, derivative assets and derivative liabilities, trading securities, awards granted under the incentive equity plan, determining the loan loss obligation on sold loans and ~~MSRs, and goodwill impairment.~~MSRs. Actual results could differ from those estimates.

Concentration of Risk

The Company has concentrated its credit risk for cash by maintaining deposits in several financial institutions, which may at times exceed amounts covered by insurance provided by the Federal Deposit Insurance Corporation (“FDIC”). The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk related to cash.

Due to the nature of the mortgage lending industry, changes in interest rates may significantly impact revenue from originating mortgages and subsequent sales of loans to investors, which are the primary source of income for the Company. The Company originates mortgage loans on property located throughout the United States, with loans originated for property located in California totaling approximately ~~22%~~17% of total loan originations for the ~~nine~~three months ended ~~September 30, 2022.~~March 31, 2023.

The Company sells mortgage loans to various third-party investors. Three investors accounted for ~~30%~~11%, ~~27%~~29%, and ~~21%~~33% of the Company’s loan sales for the ~~nine~~three months ended ~~September 30, 2022.~~March 31, 2023. No other investors accounted for more than 5% of the loan sales for the ~~nine~~three months ended ~~September 30, 2022.~~March 31, 2023.

The Company funds loans through warehouse and other lines of credit. As of ~~September 30, 2022, 15%~~March 31, 2023, 17% and ~~17%~~12% of the Company's warehouse lines were payable to two separate lenders.

NOTE 2 – FAIR VALUE

The Company's consolidated financial statements include assets and liabilities that are measured based on their estimated fair values. Refer to Note 1 - Description of Business, Presentation and Summary of Significant Accounting Policies in the ~~2021~~2022 Form 10-K for information on the fair value hierarchy, valuation methodologies, and key inputs used to measure financial assets and liabilities recorded at fair value, as well as methods and assumptions used to estimate fair value disclosures for financial instruments not recorded at fair value in their entirety on a recurring basis.

The following tables present the carrying amount and estimated fair value of financial instruments included in the consolidated financial statements.

September 30, 2022
Carrying Amount Estimated Fair Value
Level 1 Level 2 Level 3
Assets
Cash and cash equivalents $ 1,143,948 $ 1,143,948 $ — $ —
Restricted cash 160,926 160,926 — —
Loans held for sale, at fair value 2,692,820 — 2,692,820 —
Derivative assets, at fair value 316,647 — 295,737 20,910
Servicing rights, at fair value 2,030,026 — — 2,030,026
Trading securities, at fair value 97,210 — 97,210 —
Loans eligible for repurchase 554,892 — 554,892 —
Liabilities
Warehouse and other lines of credit $ 2,529,436 $ — $ 2,529,436 $ —
Derivative liabilities, at fair value 149,837 26,123 38,086 85,628
Servicing rights, at fair value 16,757 — — 16,757
Debt obligations:
Secured credit facilities 1,092,977 — 1,094,433 —
Term Notes 199,540 — 200,000 —
Senior Notes 991,187 — 561,900 —
Liability for loans eligible for repurchase 554,892 — 554,892 —


		December 31, 2021																	March 31, 2023
		Carrying Amount				Estimated Fair Value													Carrying Amount				Estimated Fair Value
				Level 1				Level 2				Level 3									Level 1				Level 2				Level 3

Assets	Assets															Assets
Cash and cash equivalents	Cash and cash equivalents			$	419,571			$	419,571			$	—			$	—	Cash and cash equivalents			$	798,119			$	798,119			$	—			$	—
Restricted cash	Restricted cash	201,025				201,025				—				—		Restricted cash			90,084				90,084				—				—
Loans held for sale, at fair value	Loans held for sale, at fair value	8,136,817				—				8,136,817				—		Loans held for sale, at fair value			2,039,367				—				2,039,367				—
Derivative assets, at fair value	Derivative assets, at fair value	194,665				4,924				5,358				184,383		Derivative assets, at fair value			84,624				10,008				13,597				61,019
Servicing rights, at fair value	Servicing rights, at fair value	2,006,712				—				—				2,006,712		Servicing rights, at fair value			2,028,788				—				—				2,028,788
Trading securities, at fair value	Trading securities, at fair value	72,874				—				72,874				—		Trading securities, at fair value			95,561				—				95,561				—
Loans eligible for repurchase	Loans eligible for repurchase	363,373				—				363,373				—		Loans eligible for repurchase			672,458				—				672,458				—

Liabilities	Liabilities															Liabilities
Warehouse and other lines of credit	Warehouse and other lines of credit	$	7,457,199			$	—			$	7,457,199			$	—	Warehouse and other lines of credit			$	1,830,319			$	—			$	1,830,319			$	—
Derivative liabilities, at fair value	Derivative liabilities, at fair value	37,797				31,070				2,964				3,763		Derivative liabilities, at fair value			35,662				5,166				28,199				2,297
Servicing rights, at fair value	Servicing rights, at fair value	7,310				—				—				7,310		Servicing rights, at fair value			12,220				—				—				12,220
Debt obligations:	Debt obligations:															Debt obligations:
Secured credit facilities	Secured credit facilities	343,759				—				345,596				—		Secured credit facilities			1,111,366				—				1,111,812				—

Term Notes	Term Notes	199,133				—				200,000				—		Term Notes			199,791				—				200,000				—

Senior Notes	Senior Notes	1,085,316				—				1,057,977				—		Senior Notes			992,555				—				554,723				—
Liability for loans eligible for repurchase	Liability for loans eligible for repurchase	363,373				—				363,373				—		Liability for loans eligible for repurchase			672,458				—				672,458				—


	December 31, 2022
	Carrying Amount		Estimated Fair Value
			Level 1		Level 2		Level 3

Assets
Cash and cash equivalents	$	863,956	$	863,956	$	—	$	—
Restricted cash	116,545		116,545		—		—
Loans held for sale, at fair value	2,373,427		—		2,373,427		—
Derivative assets, at fair value	39,411		—		10,037		29,374
Servicing rights, at fair value	2,037,447		—		—		2,037,447
Trading securities, at fair value	94,243		—		94,243		—
Loans eligible for repurchase	634,677		—		634,677		—

Liabilities
Warehouse and other lines of credit	$	2,146,602	$	—	$	2,146,602	$	—
Derivative liabilities, at fair value	67,492		18,226		43,482		5,784
Servicing rights, at fair value	12,311		—		—		12,311
Debt obligations:
Secured credit facilities	1,097,831		—		1,098,853		—
Term Notes	199,666		—		200,000		—


Senior Notes	991,822		—		645,495		—
Liability for loans eligible for repurchase	634,677		—		634,677		—

Financial Statement Items Measured at Fair Value on a Recurring Basis

The following tables presents the Company’s assets and liabilities that are measured at fair value on a recurring basis by fair value hierarchy as of the dates indicated.


	March 31, 2023
	Level 1		Level 2		Level 3		Total
Fair value through net income:
Assets:
Loans held for sale	$	—	$	2,039,367	$	—	$	2,039,367
Trading securities	—		95,561		—		95,561
Derivative assets:
Interest rate lock commitments	—		—		61,019		61,019
Forward sale contracts	—		10,977		—		10,977
Interest rate swap futures	10,008		—		—		10,008
MBS put options	—		2,620		—		2,620
Servicing rights	—		—		2,028,788		2,028,788
Total assets at fair value	$	10,008	$	2,148,525	$	2,089,807	$	4,248,340
Liabilities:
Derivative liabilities:
Interest rate lock commitments	$	—	$	—	$	2,297	$	2,297

Forward sale contracts	—		28,199		—		28,199
Put options on treasuries	5,166		—		—		5,166

Servicing rights	—		—		12,220		12,220
Total liabilities at fair value	$	5,166	$	28,199	$	14,517	$	47,882


	December 31, 2022
	Level 1		Level 2		Level 3		Total
Fair value through net income:
Assets:
Loans held for sale	$	—	$	2,373,427	$	—	$	2,373,427
Trading securities	—		94,243		—		94,243
Derivative assets:
Interest rate lock commitments	—		—		29,374		29,374
Forward sale contracts	—		6,676		—		6,676


MBS put options	—		3,361		—		3,361
Servicing rights	—		—		2,037,447		2,037,447
Total assets at fair value	$	—	$	2,477,707	$	2,066,821	$	4,544,528
Liabilities:
Derivative liabilities:
Interest rate lock commitments	$	—	$	—	$	5,784	$	5,784
Forward sale contracts	—		43,482		—		43,482
Put options on treasuries	10,831		—		—		10,831
Interest rate swap futures	7,395		—		—		7,395

Servicing rights	—		—		12,311		12,311

Total liabilities at fair value	$	18,226	$	43,482	$	18,095	$	79,803

109

September 30, 2022
Recurring Fair Value Measurements of Assets and Liabilities Using:
Quoted Market Prices in Active Markets for Identical Assets
(Level 1) Significant Other Observable Inputs
(Level 2) Significant Unobservable Inputs
(Level 3) Total Fair Value Measurements
Fair value through net income:
Assets:
Loans held for sale $ — $ 2,692,820 $ — $ 2,692,820
Trading securities — 97,210 — 97,210
Derivative assets:
Interest rate lock commitments — — 20,910 20,910
Forward sale contracts — 295,737 — 295,737
Servicing rights — — 2,030,026 2,030,026
Total assets at fair value $ — $ 3,085,767 $ 2,050,936 $ 5,136,703
Liabilities:
Derivative liabilities:
Interest rate lock commitments $ — $ — $ 85,628 $ 85,628
Interest rate swap futures 19,480 — — 19,480
Forward sale contracts — 38,086 — 38,086
Put options on treasuries 6,643 — — 6,643
Servicing rights — — 16,757 16,757
Total liabilities at fair value $ 26,123 $ 38,086 $ 102,385 $ 166,594

December 31, 2021
Recurring Fair Value Measurements of Assets and Liabilities Using:
Quoted Market Prices in Active Markets for Identical Assets
(Level 1) Significant Other Observable Inputs
(Level 2) Significant Unobservable Inputs
(Level 3) Total Fair Value Measurements
Fair value through net income:
Assets:
Loans held for sale $ — $ 8,136,817 $ — $ 8,136,817
Trading securities — 72,874 — 72,874
Derivative assets:
Interest rate lock commitments — — 184,383 184,383
Forward sale contracts — 5,358 — 5,358
Interest rate swap futures 4,924 — — 4,924
Servicing rights — — 2,006,712 2,006,712
Total assets at fair value $ 4,924 $ 8,215,049 $ 2,191,095 $ 10,411,068
Liabilities:
Derivative liabilities:
Interest rate lock commitments $ — $ — $ 3,763 $ 3,763
Forward sale contracts — 2,964 — 2,964
Put options on treasuries 31,070 — — 31,070
Servicing rights — — 7,310 7,310
Total liabilities at fair value $ 31,070 $ 2,964 $ 11,073 $ 45,107

The following presents the changes in the Company’s assets and liabilities that are measured at fair value on a recurring basis using significant unobservable inputs (Level 3):


		Three Months Ended September 30, 2022				Nine Months Ended September 30, 2022					Three Months Ended March 31, 2023
		IRLCs, net		Servicing Rights, net		IRLCs, net		Servicing Rights, net			IRLCs, net		Servicing Rights, net
Balance at beginning of period	Balance at beginning of period	$	57,605	$	2,204,593	$	180,620	$	1,999,402	Balance at beginning of period	$	23,590	$	2,025,136

Total net gains or losses included in earnings (realized and unrealized)	Total net gains or losses included in earnings (realized and unrealized)	22,112		140,598		279,266		765,143		Total net gains or losses included in earnings (realized and unrealized)	97,184		3,461
Sales and settlements	Sales and settlements									Sales and settlements

Sales	Sales			(331,922)				(751,276)		Sales			(12,029)
Settlements (1)	Settlements (1)	(102,686)		—		(374,144)		—		Settlements (1)	(43,664)		—
Transfers of IRLCs to closed loans	Transfers of IRLCs to closed loans	(41,749)		—		(150,460)		—		Transfers of IRLCs to closed loans	(18,388)		—
Balance at end of period	Balance at end of period	$	(64,718)	$	2,013,269	$	(64,718)	$	2,013,269	Balance at end of period	$	58,722	$	2,016,568

(1)Funded amount for IRLCs.


		Three Months Ended September 30, 2021				Nine Months Ended September 30, 2021					Three Months Ended March 31, 2022
		IRLCs, net		Servicing Rights, net		IRLCs, net		Servicing Rights, net			IRLCs, net		Servicing Rights, net
Balance at beginning of period	Balance at beginning of period	$	333,081	$	1,776,395	$	647,045	$	1,124,302	Balance at beginning of period	$	180,620	$	1,999,402

Total net gains or losses included in earnings (realized and unrealized)	Total net gains or losses included in earnings (realized and unrealized)	640,372		233,166		1,749,343		1,079,525		Total net gains or losses included in earnings (realized and unrealized)	142,958		411,768
Sales and settlements	Sales and settlements									Sales and settlements

Sales	Sales	—		(172,867)		—		(367,133)		Sales			(332,983)
Settlements (1)	Settlements (1)	(558,918)		—		(1,585,368)		—		Settlements (1)	(232,922)		—
Transfers of IRLCs to closed loans	Transfers of IRLCs to closed loans	(155,325)		—		(551,810)		—		Transfers of IRLCs to closed loans	(78,656)		—
Balance at end of period	Balance at end of period	$	259,210	$	1,836,694	$	259,210	$	1,836,694	Balance at end of period	$	12,000	$	2,078,187

(1)Funded amount for IRLCs.

The following presents the gains and losses included in earnings relating to the Company’s assets and liabilities that are measured at fair value on a recurring basis using significant unobservable inputs (Level 3):

Three Months Ended September 30, 2022 Nine Months Ended September 30, 2022
IRLCs, net (1)
Servicing
Rights, net(2)
IRLCs, net (1)
Servicing
Rights, net(3)
Total net (losses) gains included in earnings $ (122,323) $ 140,598 $ (245,338) $ 765,143
Change in unrealized (losses) gains relating to assets and liabilities still held at period end $ (64,718) $ 150,534 $ (64,718) $ 683,413

~~(1)Gains (losses) included in gain on origination and sale of loans, net.~~

~~(2)~~Includes $124.2 million in gains included in gain on origination and sale of loans, net and $16.4 million of gains included in change in fair value of servicing rights, net, for the three months ended September 30, 2022.

~~(3)~~Includes $574.5 million in gains included in gain on origination and sale of loans, net and $190.7 million of gains included in change in fair value of servicing rights, net, for the nine months ended September 30, 2022.

Three Months Ended September 30, 2021 Nine Months Ended September 30, 2021
IRLCs, net (1)
Servicing
Rights, net(2)
Interest Rate Lock Commitments(1)
Servicing
Rights, net(3)
Total net (losses) gains included in earnings $ (73,871) $ 233,166 $ (387,835) $ 1,079,525
Change in unrealized gains relating to assets and liabilities still held at period end $ 259,210 $ 326,527 $ 259,210 $ 1,126,433

~~(1)(Losses) gains included in gain on origination and sale of loans, net.~~

~~(2)~~Includes $345.9 million in gains included in gain on origination and sale of loans, net and $112.7 million in losses included in change in fair value of servicing rights, net, for the three months ended September 30, 2021.

~~(3)~~Includes $1.3 billion in gains included in gain on origination and sale of loans, net and $223.4 million of losses included in change in fair value of servicing rights, net, for the nine months ended September 30, 2021.


	Three Months Ended March 31, 2023
	IRLCs, net		Servicing Rights, net


Total net gains (losses) included in:
Gain on origination and sale of loans, net	$	35,132	$	59,295
Change in fair value of servicing rights, net	—		(55,834)
Total	35,132		3,461

Change in unrealized gains (losses) relating to assets and liabilities still held at period end	$	58,722	$	(37,820)

1310














	Three Months Ended March 31, 2022
	IRLCs, net		Servicing Rights, net


Total net gains (losses) included in:
Gain on origination and sale of loans, net	$	(168,620)	$	269,760
Change in fair value of servicing rights, net	—		142,008
Total	(168,620)		411,768

Change in unrealized gains relating to assets and liabilities still held at period end	$	12,000	$	408,140

The following table presents quantitative information about the valuation techniques and unobservable inputs applied to Level 3 fair value measurements for financial instruments measured at fair value on a recurring basis:


		September 30, 2022				December 31, 2021					March 31, 2023				December 31, 2022
Unobservable Input	Unobservable Input	Range of inputs			Weighted Average (2)	Range of inputs			Weighted Average (2)	Unobservable Input	Range of inputs			Weighted Average (2)	Range of inputs			Weighted Average (2)
IRLCs:	IRLCs:									IRLCs:
Pull-through rate	Pull-through rate	6.2%	-	99.9%	80.2%	0.3%	-	99.3%	74.2%	Pull-through rate	7.6%	-	99.9%	73.9%	8.4%	-	99.9%	75.3%

Servicing rights	Servicing rights									Servicing rights
Discount rate(1)	Discount rate(1)	4.9%	-	14.9%	6.3%	4.5%	-	9.0%	5.8%	Discount rate(1)	4.9%	-	16.1%	6.4%	5.0%	-	16.1%	6.5%
Prepayment rate(1)	Prepayment rate(1)	5.5%	-	19.0%	7.0%	8.4%	-	18.7%	10.2%	Prepayment rate(1)	5.7%	-	18.8%	7.6%	5.8%	-	17.6%	7.2%
Cost to service (per loan)	Cost to service (per loan)	$62	-	$143	$86	$70	-	$114	$82	Cost to service (per loan)	$63	-	$136	$88	$63	-	$138	$87

(1)The Company estimates the fair value of MSRs using an option-adjusted spread (“OAS”) model, which projects MSR cash flows over multiple interest rate scenarios in conjunction with the Company’s prepayment model, and then discounts these cash flows at risk-adjusted rates.

(2)Weighted average inputs are based on the committed amounts for IRLCs and the UPB of the underlying loans for servicing rights.

Financial Statement Items Measured at Fair Value on a Nonrecurring Basis

The Company did not have any material assets or liabilities that were recorded at fair value on a non-recurring basis as of ~~September 30, 2022~~March 31, 2023 or December 31, ~~2021.~~2022.

Financial Statement Items Measured at Amortized Cost

Warehouse and other lines of credit - The Company’s warehouse and other lines of credit bear interest at a rate that is periodically adjusted based on a market index. The carrying value of warehouse and other lines of credit approximates fair value.

Debt obligations, net - Debt consists of secured credit facilities, Term Notes, and Senior Notes. The Company’s secured credit facilities and Term Notes accrue interest at a stated base rate, plus a margin, they are highly liquid and short-term in nature and as a result, their carrying value approximated fair value as of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021.~~2022. Fair value of the Company’s Senior Notes issued in October 2020 and March 2021 were estimated using the quoted market prices at ~~September 30, 2022.~~March 31, 2023. The debt obligations are classified as Level 2 in the fair value hierarchy.

~~NOTE 3 – BALANCE SHEET NETTING~~

The Company has entered into agreements with counterparties, which include netting arrangements whereby the counterparties are entitled to settle their positions on a net basis. In certain circumstances, the Company is required to provide certain counterparties financial instruments and cash collateral against derivative financial instruments, warehouse and other lines of credit, or debt obligations. Cash collateral is held in margin accounts and included in restricted cash on the Company's consolidated balance sheets.

September 30, 2022
Gross amounts recognized Gross amounts offset in consolidated balance sheet Net amounts presented in consolidated balance sheet Gross amounts not offset in consolidated balance sheet Net amount
Financial instruments Cash collateral
Assets:
Forward sale contracts $ 495,444 $ 199,707 $ 295,737 $ — $ (193,934) $ 101,803
Total Assets $ 495,444 $ 199,707 $ 295,737 $ — $ (193,934) $ 101,803
Liabilities:
Forward sale contracts $ 237,793 $ 199,707 $ 38,086 $ — $ (1,054) $ 37,032
Put options on treasuries 6,643 — 6,643 — (6,643) —
Interest rate swap futures 19,480 — 19,480 — (19,480) —
Warehouse and other lines of credit 2,529,436 — 2,529,436 (2,529,436) — —
Secured debt obligations (1)
1,294,433 — 1,294,433 (1,294,433) — —
Total Liabilities $ 4,087,785 $ 199,707 $ 3,888,078 $ (3,823,869) $ (27,177) $ 37,032

~~(1)Secured debt obligations as of September 30, 2022 included secured credit facilities and Term Notes.~~

1511

December 31, 2021
Gross amounts recognized Gross amounts offset in consolidated balance sheets Net amounts presented in consolidated balance sheets Gross amounts not offset in consolidated balance sheets Net amount
Financial instruments Cash collateral
Assets:
Forward sale contracts $ 29,497 $ (24,139) $ 5,358 $ — $ (1,447) $ 3,911
Interest rate swap futures 4,924 — 4,924 — — 4,924
Total Assets $ 34,421 $ (24,139) $ 10,282 $ — $ (1,447) $ 8,835
Liabilities:
Forward sale contracts $ 27,103 $ (24,139) $ 2,964 $ — $ (1,736) $ 1,228
Put options on treasuries 31,070 — 31,070 — — 31,070
Warehouse and other lines of credit 7,457,199 — 7,457,199 (7,457,199) — —
Secured debt obligations (1)
545,596 — 545,596 (545,596) — —
Total Liabilities $ 8,060,968 $ (24,139) $ 8,036,829 $ (8,002,795) $ (1,736) $ 32,298

NOTE 3 – LOANS HELD FOR SALE, AT FAIR VALUE

~~(1)~~
~~Secured debt obligations~~

The following table represents the unpaid principal balance of LHFS by product type of loan as of March 31, 2023 and December 31, ~~2021 included secured credit facilities~~2022:



	March 31, 2023				December 31, 2022
	Amount		%		Amount		%
Conforming - fixed	$	1,202,885	59	%	$	1,441,497	59	%
Conforming - ARM	22,479		1		52,513		2
Government - fixed	748,674		37		815,921		34
Government - ARM	6,037		—		17,788		1
Other - residential mortgage loans	69,731		3		101,137		4
Consumer loans	1,748		—		1,774		—
Total	2,051,554		100	%	2,430,630		100	%
Fair value adjustment	(12,187)				(57,203)
Loans held for sale, at fair value	$	2,039,367			$	2,373,427

A summary of the changes in the balance of loans held for sale is as follows:


	Three Months Ended March 31,
		2023		2022
Balance at beginning of period		$	2,373,427	$	8,136,817
Origination and purchase of loans		4,891,247		21,373,625
Sales		(5,382,419)		(22,805,365)
Repurchases		133,458		139,015
Principal payments		(15,097)		(60,287)
Fair value gain (loss)		38,751		(225,137)
Balance at end of period		$	2,039,367	$	6,558,668

Gain on origination and ~~Term Notes.~~sale of loans, net is comprised of the following components:



	Three Months Ended March 31,
		2023		2022
Discount on loan sales		$	(26,669)	$	(236,096)
Servicing rights additions		59,295		269,760
Unrealized gains from derivative assets and liabilities		36,060		158,743
Realized (losses) gains from derivative assets and liabilities		(47,057)		349,040
Discount points, rebates and lender paid costs		57,446		60,067
Fair value gain (loss)		38,751		(225,137)
Provision for loan loss obligation for loans sold		(9,674)		(13,246)
Total gain on origination and sale of loans, net		$	108,152	$	363,131

The Company had $18.3 million and $24.8 million of loans held for sale on non-accrual status as of March 31, 2023 and December 31, 2022, respectively.

NOTE 4 ~~– LOANS HELD FOR SALE, AT FAIR VALUE~~

~~The following table represents the unpaid principal balance of LHFS by product type of loan as of September 30, 2022 and December 31, 2021:~~

September 30,
2022 December 31,
2021
Amount % Amount %
Conforming - fixed $ 1,696,438 60 % $ 4,881,222 61 %
Conforming - ARM 33,501 1 351,408 4
Government - fixed 895,256 32 1,156,890 15
Government - ARM 2,509 — 10,906 —
Other - residential mortgage loans 187,200 7 1,576,858 20
Consumer loans 1,797 — 1,942 —
2,816,701 100 % 7,979,226 100 %
Fair value adjustment (123,881) 157,591
Total $ 2,692,820 $ 8,136,817

~~A summary of the changes in the balance of loans held for sale is as follows:~~

Three Months Ended
September 30, Nine Months Ended
September 30,
2022 2021 2022 2021
Balance at beginning of period $ 4,656,338 $ 9,120,653 $ 8,136,817 $ 6,955,424
Origination and purchase of loans 9,700,119 31,902,260 46,842,973 107,717,154
Sales (11,728,053) (32,200,708) (52,409,647) (106,414,376)
Repurchases 164,435 138,666 498,101 802,366
Principal payments (18,822) (53,316) (119,708) (119,822)
Fair value loss (81,197) (33,819) (255,716) (67,010)
Balance at end of period $ 2,692,820 $ 8,873,736 $ 2,692,820 $ 8,873,736

~~Gain on origination and sale of loans, net is comprised of the following components:~~

Three Months Ended
September 30, Nine Months Ended
September 30,
2022 2021 2022 2021
(Discount) premium from loan sales $ (83,312) $ 674,782 $ (756,602) $ 1,552,668
Servicing rights additions 124,244 345,882 574,459 1,302,884
Unrealized gains (losses) from derivative assets and liabilities 113,913 42,984 82,110 (139,483)
Realized gains (losses) from derivative assets and liabilities 37,950 (156,514) 940,824 194,035
Discount points, rebates and lender paid costs 57,634 (49,585) 189,468 (193,043)
Fair value loss (81,197) (33,818) (255,716) (67,010)
Provision for loan loss obligation for loans sold (12,932) (2,456) (108,550) (2,723)
Total gain on origination and sale of loans, net $ 156,300 $ 821,275 $ 665,993 $ 2,647,328

~~The Company had $19.6 million and $28.8 million of loans held for sale on non-accrual status as of September 30, 2022 and December 31, 2021, respectively.~~

~~NOTE 5~~ – SERVICING RIGHTS, AT FAIR VALUE

The outstanding principal balance of the servicing portfolio was comprised of the following:


		September 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022
Conventional	Conventional	$	103,719,089	$	127,270,097	Conventional	$	104,029,019	$	104,074,252
Government	Government	35,990,544		34,842,868		Government	37,644,445		37,096,679
Total servicing portfolio	Total servicing portfolio	$	139,709,633	$	162,112,965	Total servicing portfolio	$	141,673,464	$	141,170,931

~~A summary of the unpaid principal balance underlying servicing rights is as follows:~~

September 30,
2022 December 31,
2021
Current loans $ 137,990,039 $ 160,302,966
Loans 30 - 89 days delinquent 572,209 504,467
Loans 90 or more days delinquent or in foreclosure 1,147,385 1,305,532
Total servicing portfolio (1)
$ 139,709,633 $ 162,112,965

~~(1)~~At September 30, 2022 and December 31, 2021 0.2% and 0.6%, respectively, of the servicing portfolio was in forbearance as a result of payment relief efforts afforded to borrowers as a result of the Coronavirus Aid, Relief, and Economic Security Act and other regulatory guidance.

A summary of the changes in the balance of servicing rights, net of servicing rights liability is as follows:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021		2022		2021			2023		2022
Balance at beginning of period	Balance at beginning of period	$	2,204,593	$	1,776,395	$	1,999,402	$	1,124,302	Balance at beginning of period	$	2,025,136	$	1,999,402
Additions	Additions	124,244		345,882		574,459		1,302,884		Additions	59,295		269,760
Sales proceeds, net	Sales proceeds, net	(341,415)		(182,892)		(740,728)		(365,680)		Sales proceeds, net	(11,838)		(312,849)
Changes in fair value:	Changes in fair value:									Changes in fair value:
Due to changes in valuation inputs or assumptions	Due to changes in valuation inputs or assumptions	75,366		(3,461)		373,158		98,295		Due to changes in valuation inputs or assumptions	(21,368)		198,996
Due to collection/realization of cash flows	Due to collection/realization of cash flows	(49,519)		(99,230)		(193,022)		(323,107)		Due to collection/realization of cash flows	(34,657)		(77,122)
Balance at end of period	Balance at end of period	$	2,013,269	$	1,836,694	$	2,013,269	$	1,836,694	Balance at end of period	$	2,016,568	$	2,078,187

The following is a summary of the components of loan servicing fee income as reported in the Company’s consolidated statements of operations:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021		2022		2021			2023		2022
Contractual servicing fees	Contractual servicing fees	$	104,917	$	99,640	$	327,567	$	271,374	Contractual servicing fees	$	101,132	$	108,826
Late, ancillary and other fees	Late, ancillary and other fees	8,627		2,789		14,362		8,364		Late, ancillary and other fees	17,829		2,233
Servicing fee income	Servicing fee income	$	113,544	$	102,429	$	341,929	$	279,738	Servicing fee income	$	118,961	$	111,059

The following is a summary of the components of change in fair value of servicing rights, net as reported in the Company’s consolidated statements of operations:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021		2022		2021			2023		2022
Changes in fair value:	Changes in fair value:									Changes in fair value:
Due to changes in valuation inputs or assumptions	Due to changes in valuation inputs or assumptions	$	75,366	$	(3,461)	$	373,158	$	98,295	Due to changes in valuation inputs or assumptions	$	(21,368)	$	198,996
Due to collection/realization of cash flows	Due to collection/realization of cash flows	(49,519)		(99,230)		(193,022)		(323,107)		Due to collection/realization of cash flows	(34,657)		(77,122)
Realized losses on sales of servicing rights		(13,489)		(14,218)		(5,949)		(8,224)
Net loss from derivatives hedging servicing rights		(50,837)		(21,553)		(314,557)		(94,158)
Realized gains on sales of servicing rights, net of provision										Realized gains on sales of servicing rights, net of provision	140		10,034
Net gain (loss) from derivatives hedging servicing rights										Net gain (loss) from derivatives hedging servicing rights	3,079		(200,291)
Changes in fair value of servicing rights, net	Changes in fair value of servicing rights, net	$	(38,479)	$	(138,462)	$	(140,370)	$	(327,194)	Changes in fair value of servicing rights, net	$	(52,806)	$	(68,383)

1813

The table below illustrates hypothetical changes in fair values of servicing rights, caused by assumed immediate changes to key assumptions that are used to determine fair value.


		September 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022
Fair Value of Servicing Rights, net	Fair Value of Servicing Rights, net	$	2,013,269	$	1,999,402	Fair Value of Servicing Rights, net	$	2,016,568	$	2,025,136
Change in Fair Value from adverse changes:	Change in Fair Value from adverse changes:					Change in Fair Value from adverse changes:
Discount Rate:	Discount Rate:					Discount Rate:
Increase 1%	Increase 1%	(81,235)		(85,066)		Increase 1%	(80,524)		(81,431)
Increase 2%	Increase 2%	(156,903)		(163,255)		Increase 2%	(155,548)		(157,281)
Cost of Servicing:	Cost of Servicing:					Cost of Servicing:
Increase 10%	Increase 10%	(18,990)		(20,843)		Increase 10%	(19,333)		(19,017)
Increase 20%	Increase 20%	(38,066)		(41,727)		Increase 20%	(38,772)		(38,127)
Prepayment Speed:	Prepayment Speed:					Prepayment Speed:
Increase 10%	Increase 10%	(17,625)		(76,532)		Increase 10%	(23,181)		(18,863)
Increase 20%	Increase 20%	(35,139)		(148,556)		Increase 20%	(45,837)		(37,546)

Sensitivities are hypothetical changes in fair value and cannot be extrapolated because the relationship of changes in assumptions to changes in fair value may not be linear. Also, the effect of a variation in a particular assumption is calculated without changing any other assumption, whereas a change in one factor may result in changes to another. Accordingly, no assurance can be given that actual results would be consistent with the results of these estimates. As a result, actual future changes in servicing rights values may differ significantly from those displayed above.

NOTE 5 – DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES

Derivatives instruments utilized by the Company primarily include interest rate lock commitments, forward sale contracts, MBS put options, put options on treasuries, and interest rate swap futures. Derivative financial instruments are recognized as assets or liabilities and are measured at fair value. The Company accounts for derivatives as free-standing derivatives and does not designate any derivative financial instruments for hedge accounting. All derivative financial instruments are recognized on the consolidated balance sheets at fair value with changes in the fair values being reported in current period earnings. The Company does not use derivative financial instruments for purposes other than in support of its risk management activities. Refer to Note 1- Description of Business and Summary of Significant Accounting Policies and Note 2- Fair Value for further details on derivatives in the 2022 Form 10-K.

The following summarizes the Company’s outstanding derivative instruments:


				Fair Value
	Notional		Balance Sheet Location	Asset		Liability
March 31, 2023:
Interest rate lock commitments	$	2,840,324	Derivative asset, at fair value	$	61,019
Interest rate lock commitments	318,091		Derivative liabilities, at fair value	—		2,297

Forward sale contracts	341,310		Derivative asset, at fair value	10,977		—
Forward sale contracts	3,165,075		Derivative liabilities, at fair value	—		28,199

Put options on treasuries	—		Derivative asset, at fair value	—		—
Put options on treasuries	5,750		Derivative liabilities, at fair value	—		5,166

MBS put options	300,000		Derivative asset, at fair value	2,620		—
MBS put options	—		Derivative liabilities, at fair value	—		—

Interest rate swap futures	607		Derivative asset, at fair value	10,008		—
Interest rate swap futures	—		Derivative liabilities, at fair value	—		—
			Total derivative financial instruments	$	84,624	$	35,662


				Fair Value
	Notional		Balance Sheet Location	Asset		Liability
December 31, 2022:
Interest rate lock commitments	$	1,591,807	Derivative asset, at fair value	$	29,374	$	—
Interest rate lock commitments	622,706		Derivative liabilities, at fair value	—		5,784

Forward sale contracts	309,809		Derivative asset, at fair value	6,676		—
Forward sale contracts	2,963,685		Derivative liabilities, at fair value	—		43,482

Put options on treasuries	—		Derivative asset, at fair value	—		—
Put options on treasuries	8,050		Derivative liabilities, at fair value	—		10,831

MBS put options	400,000		Derivative asset, at fair value	3,361		—
MBS put options	—		Derivative liabilities, at fair value	—		—

Interest rate swap futures	—		Derivative asset, at fair value	—		—
Interest rate swap futures	211		Derivative liabilities, at fair value	—		7,395
			Total derivative financial instruments	$	39,411	$	67,492

Because many of the Company’s current derivative agreements are not exchange-traded, the Company is exposed to credit loss in the event of nonperformance by the counterparty to the agreements. The Company controls this risk through credit monitoring procedures including financial analysis, dollar limits and other monitoring procedures. The notional amount of the contracts does not represent the Company’s exposure to credit loss.

The following summarizes the realized and unrealized net gains or losses on derivative financial instruments and the consolidated statements of operations line items where such gains and losses are included:


		Three Months Ended March 31,
Derivative instrument	Statements of Operations Location	2023		2022
Interest rate lock commitments, net	Gain on origination and sale of loans, net	$	35,132	$	(168,620)
Forward sale contracts	Gain on origination and sale of loans, net	(43,136)		664,519
Interest rate swap futures	Gain on origination and sale of loans, net	(60)		(33,682)
Put options	Gain on origination and sale of loans, net	(2,933)		45,566
Forward sale contracts	Change in fair value of servicing rights, net	(2,791)		(74,227)
Interest rate swap futures	Change in fair value of servicing rights, net	1,238		(126,663)
Put options	Change in fair value of servicing rights, net	4,632		599
Total realized and unrealized (losses) gains on derivative financial instruments		$	(7,918)	$	307,492

NOTE 6 – ~~DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES~~BALANCE SHEET NETTING

~~Derivatives instruments utilized by~~The Company has entered into agreements with counterparties, which include netting arrangements whereby the counterparties are entitled to settle their positions on a net basis. In certain circumstances, the Company ~~primarily include interest rate lock commitments, forward sale contracts, MBS put options, put options on treasuries, and interest rate swap futures. Derivative~~is required to provide certain counterparties financial instruments ~~are recognized as assets or liabilities~~ and ~~are measured at fair value. The Company accounts for derivatives as free-standing derivatives and does not designate any~~cash collateral against derivative financial instruments, ~~for hedge accounting. All derivative~~warehouse and other lines of credit, or debt obligations. Cash collateral is held in margin accounts and included in restricted cash on the Company's consolidated balance sheets.

The table below represents financial assets and liabilities that are subject to master netting arrangements or similar agreements categorized by financial instrument, together with corresponding financial instruments and corresponding collateral received or pledged. In circumstances where right of set off criteria is met, the related asset and liability are ~~recognized~~presented in a net position on the consolidated balance sheets. Warehouse and other lines of credit and secured debt obligations were secured by financial instruments and cash collateral with fair values that exceeded the liability amount recorded on the consolidated balance sheets ~~at fair value with changes in the fair values being reported in current period earnings. The Company does not use derivative financial instruments for purposes other than in support~~as of ~~its risk management activities.~~March 31, 2023 and December 31, 2022, respectively. Refer to Note ~~1- Description~~8 – Warehouse and Other Lines of ~~Business, Presentation and Summary of Significant Accounting Policies and Note 3- Fair Value~~Credit for further details on ~~derivatives in the 2021 Form 10-K.~~cash collateral requirements.


	March 31, 2023
	Gross amounts recognized		Gross amounts offset in consolidated balance sheet		Net amounts presented in consolidated balance sheet		Gross amounts not offset in consolidated balance sheet				Net amount

							Financial instruments		Cash collateral


Assets:
Forward sale contracts	$	26,662	$	(15,685)	$	10,977	$	—	$	—	$	10,977

MBS put options	2,620		—		2,620		—		—		2,620
Interest rate swap futures	10,008		—		10,008		—		—		10,008
Total assets	$	39,290	$	(15,685)	$	23,605	$	—	$	—	$	23,605

Liabilities:
Forward sale contracts	$	43,884	$	(15,685)	$	28,199	$	—	$	(25,904)	$	2,295
Put options on treasuries	5,166		—		5,166		—		(5,166)		—


Warehouse and other lines of credit	1,830,319		—		1,830,319		(1,830,319)		—		—
Secured debt obligations (1)	1,311,812		—		1,311,812		(1,311,812)		—		—
Total liabilities	$	3,191,181	$	(15,685)	$	3,175,496	$	(3,142,131)	$	(31,070)	$	2,295

(1)Secured debt obligations as of March 31, 2023 included secured credit facilities and Term Notes.

1916

~~The following summarizes the Company’s outstanding derivative instruments:~~


					Fair Value
		Notional		Balance Sheet Location	Asset		Liability
September 30, 2022:
Interest rate lock commitments		$	1,645,122	Derivative asset, at fair value	$	20,910
Interest rate lock commitments		3,171,270		Derivative liabilities, at fair value	—		85,628

Forward sale contracts		20,523,121		Derivative asset, at fair value	295,737		—
Forward sale contracts		896,425		Derivative liabilities, at fair value	—		38,086

Put options on treasuries		—		Derivative asset, at fair value	—		—
Put options on treasuries		1,725		Derivative liabilities, at fair value	—		6,643

										December 31, 2022
										Gross amounts recognized				Gross amounts offset in consolidated balance sheets			Net amounts presented in consolidated balance sheets		Gross amounts not offset in consolidated balance sheets				Net amount

																Financial instruments			Cash collateral

Assets:									Assets:
Forward sale contracts									Forward sale contracts			$	39,386						$	(32,710)	$	6,676	$	—	$	—	$	6,676

MBS put options									MBS put options			3,361					—		3,361		—		—		3,361

Total assets									Total assets			$	42,747				$	(32,710)	$	10,037	$	—	$	—	$	10,037

Liabilities:									Liabilities:
Forward sale contracts									Forward sale contracts	$	76,192			$	(32,710)		$	43,482	$	—	$	(36,270)	$	7,212
Put options on treasuries									Put options on treasuries	10,831				—			10,831		—		(10,831)		—
Interest rate swap futures	Interest rate swap futures	—		Derivative asset, at fair value	—		—		Interest rate swap futures	7,395				—			7,395		—		(7,395)		—
Interest rate swap futures		650		Derivative liabilities, at fair value	—		19,480
				Total derivative financial instruments	$	316,647	$	149,837
Warehouse and other lines of credit									Warehouse and other lines of credit	2,146,602				—			2,146,602		(2,146,602)		—		—
Secured debt obligations (1)									Secured debt obligations (1)	1,298,853				—			1,298,853		(1,298,853)		—		—
Total liabilities									Total liabilities	$	3,539,873			$	(32,710)		$	3,507,163	$	(3,445,455)	$	(54,496)	$	7,212

(1)Secured debt obligations as of December 31, 2022 included secured credit facilities and Term Notes.

Fair Value
Notional Balance Sheet Location Asset Liability
December 31, 2021:
Interest rate lock commitments $ 11,530,721 Derivative asset, at fair value $ 184,383 $ —
Interest rate lock commitments 1,125,911 Derivative liabilities, at fair value — 3,763
Forward sale contracts 19,482,705 Derivative asset, at fair value 5,358 —
Forward sale contracts 13,171,462 Derivative liabilities, at fair value — 2,964
Put options on treasuries — Derivative asset, at fair value — —
Put options on treasuries 16,980 Derivative liabilities, at fair value — 31,070
Interest rate swap futures 2,640 Derivative asset, at fair value 4,924 —
Interest rate swap futures — Derivative liabilities, at fair value — —
Total derivative financial instruments $ 194,665 $ 37,797

Three Months Ended
September 30, Nine Months Ended
September 30,
Derivative instrument Statements of Operations Location 2022 2021 2022 2021
Interest rate lock commitments, net Gain on origination and sale of loans, net $ (122,323) $ (73,871) $ (245,338) $ (387,835)
Forward sale contracts Gain on origination and sale of loans, net 259,360 (29,867) 1,221,817 477,215
Interest rate swap futures Gain on origination and sale of loans, net 2,279 (29,683) (82,251) (81,891)
Put options Gain on origination and sale of loans, net 12,547 19,891 128,706 47,063
Forward sale contracts Change in fair value of servicing rights, net (16,293) (5,838) (113,920) (84,842)
Interest rate swap futures Change in fair value of servicing rights, net (31,598) (14,033) (197,177) (6,855)
Put options Change in fair value of servicing rights, net (2,946) (1,682) (3,460) (2,461)
Total realized and unrealized gains (losses) on derivative financial instruments $ 101,026 $ (135,083) $ 708,377 $ (39,606)

~~NOTE 7 – GOODWILL AND OTHER INTANGIBLE ASSETS, NET~~

~~A summary of the Company’s activity related to goodwill is as follows.~~

Goodwill Other intangible assets Total
Balance, December 31, 2021 $ 40,736 $ 1,581 $ 42,317
Amortization — (205) (205)
Impairment loss (40,736) (1,376) (42,112)
Balance, September 30, 2022 $ — $ — $ —

Goodwill Other intangible assets Total
Balance, December 31, 2020 $ 40,736 $ 2,090 $ 42,826
Amortization — (255) (255)
Balance September 30, 2021 $ 40,736 $ 1,835 $ 42,571

The Company performs its annual assessment of possible impairment of goodwill and intangible assets as of December 31, or more frequently if events and circumstances indicate that impairment may have occurred. The Company compares the fair value of each reporting unit with its carrying amount, including goodwill. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss is recognized in an amount equal to that excess.

During the second quarter of 2022, the Company performed an interim impairment test due to the impact of rising interest rates on the mortgage industry and the Company’s recent stock performance. The evaluation of goodwill included a market based and income based approach. Based upon the results of this evaluation, an impairment charge of $40.7 million was recognized, driven predominantly by a significant decline in our market capitalization.

In addition to goodwill, the Company had other intangible assets related to trademarks associated with prior acquisitions. The Company reviews intangible assets for possible impairment whenever events or circumstances indicate that

carrying amounts may not be recoverable. The factors outlined in the goodwill impairment discussion above triggered an interim impairment evaluation of other intangible assets during the second quarter of 2022. Based upon the results of this evaluation, an impairment charge of $1.4 million was recognized.

NOTE 87 – VARIABLE INTEREST ENTITIES

The determination of whether the assets and liabilities of the VIEs are consolidated or not consolidated in the consolidated balance sheets depends on the terms of the related transaction and the Company’s continuing involvement, if any, with the VIE. The Company is deemed the primary beneficiary and therefore consolidates VIEs for which it has both (a) the power, through voting rights or similar rights, to direct the activities that most significantly impact the VIE's economic performance, and (b) benefits, as defined, from the VIE. The Company determines whether it holds a significant variable interest in a VIE based on a consideration of both qualitative and quantitative factors regarding the nature, size, and form of its involvement with the VIE. The Company assesses whether it is the primary beneficiary of a VIE on an ongoing basis. The Company did not provide any non-contractual financial support to VIEs for the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 and year ended December 31, ~~2021.~~2022.

Consolidated VIEs

The Company is a holding company, its sole material asset is its equity interest in LD Holdings and as the sole managing member of LD Holdings, the Company indirectly operates and controls all of LD Holdings’ business and affairs. LD Holdings is considered a VIE and the financial results of LD Holdings and its subsidiaries are consolidated. A portion of net earnings or loss is allocated to noncontrolling interest to reflect the entitlement of the Continuing LLC Members.

The Company is involved in several types of securitization and financing transactions that utilize special purpose entities (“SPEs”). The Company’s principal use of SPEs is to obtain liquidity by securitizing certain of its financial and non-financial assets. SPEs involved in the Company’s securitization and other financing transactions are often considered VIEs.

The Company consolidates securitization facilities that finance mortgage loans held for sale, and SPEs established as trusts to finance mortgage servicing rights and servicing advance receivables. The Company sells assets to a securitization or trust, which issue beneficial interests that are collateralized by the transferred assets and entitle the investors to specified cash flows generated therefrom. The Company may retain beneficial interests in the assets sold. The Company also holds certain conditional repurchase options specific to these securitizations that allow it to repurchase assets from the securitization entity. The Company’s economic exposure to loss from outstanding third-party financing is generally limited to the carrying value of the assets financed. The Company has retained risks in the securitizations including customary representations and warranties. For securitization facilities, the Company, as seller, has an option to prepay and redeem outstanding classes of issued notes after

a set time period has elapsed. The Company’s exposure to these entities is primarily through its role as seller, servicer, and administrator. Servicing functions include, but are not limited to, general collection activity, preparing and furnishing statements, and loss mitigation efforts including repossession and sale of collateral.

The Company ~~sells~~may sell mortgage loans to investors through private label securitizations which are accounted for either as sales or secured borrowings. The Company may retain economic interests in the securitized and sold assets, which are generally retained in the form of senior or subordinated interests, residual interests, and/or servicing rights. The Company evaluates its interests in each private label securitization for classification as a VIE. The Company accounts for a securitization as a sale when it has relinquished control over the transferred financial assets and does not hold other interests in the VIE that individually, or in the aggregate, would absorb more than an insignificant amount of the VIE’s expected losses or receive more than an insignificant amount of the VIE’s expected residual returns. The Company has an option to exercise a cleanup call to purchase the remaining mortgage loans and any trust property when the remaining aggregate principal balance is less than 10% of the initial aggregate principal balance.

The table below presents a summary of the carrying value and balance sheet classification of assets and liabilities in the Company’s consolidated securitization and SPE ~~VIEs~~VIEs.


		September 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022

Assets	Assets					Assets
Loans held for sale, at fair value	Loans held for sale, at fair value	$	481,950	$	2,557,490	Loans held for sale, at fair value	$	506,808	$	497,574
Restricted cash	Restricted cash	21,634		100,494		Restricted cash	3,547		6,735
Servicing rights, at fair value	Servicing rights, at fair value	527,059		400,678		Servicing rights, at fair value	553,236		544,729
Prepaid expenses and other assets	Prepaid expenses and other assets	34,711		17,756		Prepaid expenses and other assets	55,819		54,887
		$	1,065,354	$	3,076,418
Total						Total	$	1,119,410	$	1,103,925

Liabilities	Liabilities					Liabilities
Warehouse and other lines of credit	Warehouse and other lines of credit	$	500,000	$	2,600,000	Warehouse and other lines of credit	$	500,000	$	500,000
Debt obligations, net:	Debt obligations, net:					Debt obligations, net:
MSR Facilities	MSR Facilities	116,874		15,000		MSR Facilities	126,874		116,874
Servicing advance facilities	Servicing advance facilities	30,677		15,070		Servicing advance facilities	50,316		48,484
Term notes	Term notes	199,540		199,133		Term notes	199,791		199,666

Total						Total	$	876,981	$	865,024

		$	847,091	$	2,829,203

Non-Consolidated VIEs

The nature, purpose, and activities of non-consolidated VIEs currently encompass the Company’s investments in retained interests from securitizations and joint ventures. The table below presents a summary of the nonconsolidated VIEs for which the Company holds variable interests.

September 30, 2022
Carrying value Maximum
exposure to loss Total assets in VIEs
Assets Liabilities
Retained interests $ 97,210 $ — $ 97,210 $ 2,340,730
Investments in joint ventures 19,938 — 19,938 17,605
$ 117,148 $ — $ 117,148
December 31, 2021
Carrying value Maximum
exposure to loss Total assets in VIEs
Assets Liabilities
Retained interests $ 72,874 $ — $ 72,874 $ 1,424,857
Investments in joint ventures 18,553 — 18,553 20,783
$ 91,427 $ — $ 91,427

2318


	March 31, 2023
	Carrying value				Maximum exposure to loss		Total assets in VIEs
	Assets		Liabilities
Retained interests	$	95,561	$	—	$	95,561	$	2,285,471
Investments in joint ventures	18,266		—		18,266		18,622
Total	$	113,827	$	—	$	113,827

	December 31, 2022
	Carrying value				Maximum exposure to loss		Total assets in VIEs
	Assets		Liabilities
Retained interests	$	94,243	$	—	$	94,243	$	2,309,739
Investments in joint ventures	20,410		—		20,410		38,682
Total	$	114,653	$	—	$	114,653

Retained interests

In 2022 and 2021, the Company completed the sale and securitization of non-owner occupied residential mortgage loans. Pursuant to the credit risk retention requirements, the Company, as sponsor, is required to retain at least a 5% economic interest in the credit risk of the assets collateralizing the securitization transactions. The retained interests represent a variable interest in the securitizations. The Company determined it was not the primary beneficiary of the VIE. The Company’s continuing involvement is limited to customary servicing obligations as ~~servicing administrator~~servicer associated with retained servicing rights and the receipt of principal and interest associated with the retained interests. The investors and the securitization trusts have no recourse to the Company’s assets; holders of the securities issued by each trust can look only to the loans owned by the trust for payment. The retained interests held by the Company are subject principally to the credit risk stemming from the underlying transferred loans. The securitization trusts used to effect these transactions are variable interest entities that the Company does not consolidate. The Company remeasures the carrying value of its retained interests at each reporting date to reflect their current fair value which is included in trading securities, at fair value on the consolidated balance sheets, with corresponding gains or losses included in other income on the consolidated ~~income statements.~~statements of operations. As of ~~September 30, 2022,~~March 31, 2023, the remaining principal balance of loans transferred to these securitization trusts was $2.3 billion of which ~~$1.6~~$10.6 million was 90 days or more past due.

Investments in joint ventures

The Company’s joint ventures include investments with home builders, real estate brokers, and commercial real estate companies to provide loan origination services and real estate settlement services to customers referred by the Company’s joint venture partners. The Company is generally not determined to be the primary beneficiary in its joint venture VIEs because it does not have the power, through voting rights or similar rights, to direct the activities that most significantly impact the economic performance of the VIE. The Company’s pro rata share of net earnings of joint ventures was ~~$4.6 million and $10.8~~$3.8 million for the three ~~and nine~~ months ended ~~September 30, 2022, respectively,~~March 31, 2023, and ~~$3.0 million and $8.1~~$2.0 million for the three ~~and nine~~ months ended ~~September 30, 2021, respectively,~~March 31, 2022, and is included in other income in the consolidated statements of operations.

NOTE 98 – WAREHOUSE AND OTHER LINES OF CREDIT

At ~~September 30, 2022,~~March 31, 2023, the Company was a party to 109 revolving lines of credit with lenders providing ~~$5.7~~$4.1 billion of warehouse and securitization facilities. The facilities are used to fund, and are secured by, residential mortgage loans held for sale. The facilities are repaid using proceeds from the sale of loans. Interest is generally payable monthly in arrears or on the

repurchase date of a loan, and outstanding principal is payable upon receipt of loan sale proceeds or on the repurchase date of a loan. Outstanding principal related to a particular loan must also be repaid after the expiration of a contractual period of time or, if applicable, upon the occurrence of certain events of default with respect to the underlying loan. Interest expense is recorded to interest expense on the consolidated statements of operations. The base interest rates on the facilities bear interest at ~~30-day LIBOR,~~SOFR, or other alternative base rate, ~~such as SOFR,~~ plus a margin. Some of the facilities carry additional fees charged on the total line amount, commitment fees charged on the committed portion of the line, and non-usage fees charged when monthly usage falls below a certain utilization percentage. As of ~~September 30, 2022,~~March 31, 2023, the interest rate was comprised of the applicable base rate plus a spread ranging from 1.37% to 2.25%. The base interest rate for warehouse facilities is subject to increase based upon the characteristics of the underlying loans collateralizing the lines of credit, including, but not limited to product type and number of days held for sale. The warehouse lines are scheduled to expire through ~~2023 under~~ ~~one~~ ~~or two year terms.~~2023. As of ~~September 30, 2022~~March 31, 2023 there was one securitization facility with an original three year term scheduled to expire in 2024. All warehouse lines and other lines of credit are subject to renewal based on an annual credit review conducted by the lender.

Certain warehouse line lenders require the Company to maintain cash accounts with minimum required balances at all times. As of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021, there was $5.5~~2022, the Company had posted a total of $7.8 million and ~~$8.0~~$11.0 million, ~~respectively, held in these accounts which are recorded as a component of~~ restricted cash onas collateral with our warehouse lenders and securitization facilities of which $4.3 million and $4.3 million were the ~~consolidated balance sheets.~~minimum required balances.

Under the terms of these warehouse lines, the Company is required to maintain various financial and other covenants. As of ~~September 30, 2022,~~March 31, 2023, the Company amended certain warehouse lines related to certain profitability covenants, following which the Company was in compliance with those financial covenants.

Securitization Facilities

In October 2020, the Company issued notes and a class of owner trust certificates through a securitization facility (“2020-1 Securitization Facility”) backed by a revolving warehouse line of credit. The 2020-1 Securitization Facility was secured by newly originated, first-lien, residential mortgage loans eligible for purchase by Fannie Mae and Freddie Mac for the purchase of mortgage loans or in accordance with the criteria of Ginnie Mae for the guarantee of securities backed by mortgage loans. The 2020-1 Securitization Facility issued $600.0 million in notes and certificates that accrued interest at 30-day LIBOR plus a margin. In March 2022, the Company exercised its right to optional prepayment in full and terminated the 2020-1 Securitization Facility.

In December 2020, the Company issued notes and a class of owner trust certificates through an additional securitization facility (“2020-2 Securitization Facility”) backed by a revolving warehouse line of credit. The 2020-2 Securitization Facility was secured by newly originated, first-lien, fixed rate residential mortgage loans eligible for purchase by the GSEs or in accordance with the criteria of Ginnie Mae for the guarantee of securities backed by mortgage loans. The 2020-2 Securitization Facility issued $500.0 million in notes and certificates that accrued interest at 30-day LIBOR plus a margin. In August 2022, the Company exercised its right to optional prepayment in full and terminated the 2020-2 Securitization Facility.

In February 2021, the Company issued notes and a class of owner trust certificates through an additional securitization facility (“2021-1 Securitization Facility”) backed by a revolving warehouse line of credit. The 2021-1 Securitization Facility was secured by newly originated, first-lien, fixed-rate or adjustable-rate, residential mortgage loans originated in accordance with the criteria of Fannie Mae and Freddie Mac for the purchase of mortgage loans or in accordance with the criteria of Ginnie Mae for the guarantee of securities backed by mortgage loans. The 2021-1 Securitization Facility issued $500.0 million in notes that accrued interest at 30-day LIBOR plus a margin. In September 2022, the Company exercised its right to optional prepayment in full and terminated the 2021-1 Securitization Facility.

In April 2021, the Company issued notes and a class of owner trust certificates through an additional securitization facility (“2021-2 Securitization Facility”) backed by a revolving warehouse line of credit. The 2021-2 Securitization Facility was secured by newly originated, first-lien, fixed-rate or adjustable-rate, residential mortgage loans originated in accordance with the criteria of Fannie Mae and Freddie Mac for the purchase of mortgage loans or in accordance with the criteria of Ginnie Mae for the guarantee of securities backed by mortgage loans. The 2021-2 Securitization Facility issued $500.0 million in notes that accrued interest at 30-day LIBOR, plus a margin. In September 2022, the Company exercised its right to optional prepayment in full and terminated the 2021-2 Securitization Facility.

In October 2021, the Company issued notes and a class of owner trust certificates through an additional securitization facility (“2021-3 Securitization Facility”) backed by a revolving warehouse line of credit. The 2021-3 Securitization Facility is secured by newly originated, first-lien, fixed-rate or adjustable-rate, residential mortgage loans originated in accordance with the criteria of Fannie Mae and Freddie Mac for the purchase of mortgage loans or in accordance with the criteria of Ginnie Mae for the guarantee of securities backed by mortgage loans. The 2021-3 Securitization Facility issued $500.0 million in notes that bear interest at 30-day LIBOR, or other alternative base rate such as SOFR, plus a margin. The 2021-3 Securitization Facility will terminate on the earlier of (i) the ~~three-year~~three-year anniversary of the initial purchase date, (ii) the Company exercising its right to optional prepayment in full, and (iii) the date of the occurrence and continuance of an event of default.

The following table presents information on warehouse and securitization facilities and the outstanding balance as of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021:~~2022:


									Outstanding Balance									Outstanding Balance
		Committed Amount		Uncommitted Amount		Total Facility Amount		Expiration Date	September 30, 2022		December 31, 2021			Committed Amount		Uncommitted Amount		Total Facility Amount		Expiration Date	March 31, 2023		December 31, 2022
Facility 1(1)	Facility 1(1)	$	400,000	$	1,100,000	$	1,500,000	10/29/2022	$	441,230	$	851,088	Facility 1(1)	$	400,000	$	350,000	$	750,000	10/26/2023	$	212,349	$	382,098
Facility 2(2)	Facility 2(2)	—		300,000		300,000		9/25/2023	172,313		295,743		Facility 2(2)	—		300,000		300,000		9/25/2023	182,777		236,144
Facility 3(3)	Facility 3(3)	—		300,000		300,000		4/18/2023	290,197		459,018		Facility 3(3)	—		300,000		300,000		4/18/2023	214,915		177,900
Facility 4	Facility 4	—		450,000		450,000		11/14/2022	226,888		266,230		Facility 4	—		300,000		300,000		12/28/2023	94,960		202,548
Facility 5(2)	Facility 5(2)	—		200,000		200,000		N/A	92		391		Facility 5(2)	—		200,000		200,000		N/A	—		—
Facility 6(2)	Facility 6(2)	100,000		500,000		600,000		9/29/2023	310,042		583,449		Facility 6(2)	100,000		500,000		600,000		9/29/2023	93,942		180,273
Facility 7~~(3)~~(4)	Facility 7~~(3)~~(4)	400,000		400,000		800,000		5/5/2023	382,952		1,410,367		Facility 7~~(3)~~(4)	400,000		400,000		800,000		5/5/2023	307,683		295,064

Facility 8	Facility 8	—		750,000		750,000		N/A	25,113		361,783		Facility 8	—		300,000		300,000		9/21/2023	223,693		172,575
Facility 9(4)(5)		—		—		—		10/25/2022	—		600,000
Facility 10(4)(7)		—		—		—		12/17/2023	—		500,000
Facility 11(2)(6)		—		—		—		9/23/2022	—		263,516

Facility 12(4)(8)		—		—		—		2/2/2024	—		500,000
Facility 13(4)(8)		—		—		—		4/23/2024	—		500,000
Facility 14		—		300,000		300,000		9/21/2023	180,609		365,614
Facility 15(4)		500,000		—		500,000		10/21/2024	500,000		500,000
Facility 9(5)													Facility 9(5)	500,000		—		500,000		10/21/2024	500,000		500,000
Total	Total	$	1,400,000	$	4,300,000	$	5,700,000		$	2,529,436	$	7,457,199	Total	$	1,400,000	$	2,650,000	$	4,050,000		$	1,830,319	$	2,146,602

(1)The total facility is available both to fund loan originations and also provide liquidity under a gestation facility to finance recently sold MBS up to the MBS settlement date. ~~In October 2022, this facility was extended to October 2023.~~

(2)In addition to the warehouse line, the lender provides a separate gestation facility to finance recently sold MBS up to the MBS settlement date.

(3)In May 2023, this facility was extended to April 2024.

(4)In addition to the outstanding balance secured by mortgage loans, the Company has ~~$116.9~~$126.9 million outstanding to finance servicing rights included within debt obligations in the consolidated balance sheets. In May 2023, this facility was extended to November 2023 and total facility reduced to $600.0 million of which $250.0 million is committed.

~~(4)~~(5)Securitization backed by a revolving warehouse facility to finance newly originated first-lien fixed and adjustable rate mortgage loans.

~~(5)This facility was prepaid and terminated in March 2022.~~

~~(6)This facility was prepaid and terminated in July 2022.~~

~~(7)This facility was prepaid and terminated in August 2022.~~

~~(8)This facility was prepaid and terminated in September 2022.~~

The following table presents information on borrowings under warehouse and securitization facilities:


		Three Months Ended September 30,						Nine Months Ended September 30,							Three Months Ended March 31,
		2022			2021			2022			2021					2023			2022
Maximum outstanding balance during the period	Maximum outstanding balance during the period	$	4,354,864		$	9,078,257		$	7,672,559		$	9,180,276		Maximum outstanding balance during the period		$	2,152,855		$	7,672,559
Average balance outstanding during the period	Average balance outstanding during the period	3,417,252			8,515,189			4,868,397			8,066,303			Average balance outstanding during the period		1,518,210			6,290,744
Collateral pledged (loans held for sale)	Collateral pledged (loans held for sale)	2,566,330			8,675,750			2,566,330			8,675,750			Collateral pledged (loans held for sale)		1,909,375			6,431,228
Weighted average interest rate during the period	Weighted average interest rate during the period	4.18		%	2.22		%	2.89		%	2.25		%	Weighted average interest rate during the period		6.62		%	2.01		%

NOTE 109 – DEBT OBLIGATIONS

The following table presents the outstanding debt as of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021:~~2022:


		September 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022
Secured debt obligations, net:	Secured debt obligations, net:					Secured debt obligations, net:
Secured credit facilities	Secured credit facilities					Secured credit facilities
MSR facilities	MSR facilities	$	969,048	$	262,250	MSR facilities	$	974,410	$	963,834
Securities financing facilities	Securities financing facilities	93,252		66,439		Securities financing facilities	86,640		85,513
Servicing advance facilities	Servicing advance facilities	30,677		15,070		Servicing advance facilities	50,316		48,484
Total secured credit facilities	Total secured credit facilities	1,092,977		343,759		Total secured credit facilities	1,111,366		1,097,831
Term Notes	Term Notes	199,540		199,133		Term Notes	199,791		199,666

Total secured debt obligations, net	Total secured debt obligations, net	1,292,517		542,892		Total secured debt obligations, net	1,311,157		1,297,497
Unsecured debt obligations, net:	Unsecured debt obligations, net:					Unsecured debt obligations, net:

Senior Notes	Senior Notes	991,187		1,085,316		Senior Notes	992,555		991,822

Total debt obligations, net	Total debt obligations, net	$	2,283,704	$	1,628,208	Total debt obligations, net	$	2,303,712	$	2,289,319

Certain of the Company’s secured debt obligations require us to satisfy financial covenants including minimum levels of profitability, tangible net worth, liquidity, and maximum levels of consolidated leverage. The Company obtained amendments relating to certain profitability covenants. As a result, the Company was in compliance with all such financial covenants as of ~~September 30, 2022.~~March 31, 2023.

Secured Credit Facilities

Secured credit facilities are revolving facilities collateralized by MSRs, trading securities, and servicing advances.

MSR Facilities

In October 2014, the Company entered into a $25.0 million credit facility to finance servicing rights and for other working capital needs and general corporate purposes. The Company has entered into subsequent amendments to increase and decrease the size of the facility and extend the maturity date. The facility is secured by Freddie Mac mortgage servicing rights

with a fair value of ~~$289.6~~$275.9 million as of ~~September 30, 2022~~March 31, 2023 and accrues interest at a base rate per annum of 30-day LIBOR, or other alternative base rate such as SOFR, plus a margin. As of ~~September 30, 2022,~~March 31, 2023, there was ~~$205.5~~$200.0 million outstanding on this facility with a maturity of June 2023. At ~~September 30, 2022,~~March 31, 2023, capacity under the facility was ~~$268.0~~$200.0 million. Advances for servicing rights are determined using a borrowing base formula calculated against the fair market value of the pledged servicing rights. In April 2023, capacity under this facility was lowered to $185.0 million.

In December 2021, the Company entered into a credit facility agreement which provides $300.0 million in borrowing capacity, with an option to increase up to $500.0 million upon mutual consent, available to the Company. The facility is secured by Freddie Mac mortgage servicing rights with a fair value of ~~$526.6~~$514.4 million as of ~~September 30, 2022, and~~March 31, 2023. The facility bears interest at ~~30-day LIBOR, or other alternative base rate such as~~ SOFR, plus a margin per ~~annum.~~annum and matures in December 2023. At ~~September 30, 2022,~~March 31, 2023, there was $300.0 million outstanding on this facility and ~~$0.2~~$0.4 million in unamortized deferred financing costs.

In January 2022, the Company entered into a credit facility agreement which provides $500.0 million in borrowing capacity. The facility is secured by Fannie Mae mortgage servicing rights with a fair value of ~~$621.4~~$627.0 million as of ~~September 30, 2022 and~~March 31, 2023. The facility bears interest at SOFR, plus a margin per ~~annum.~~annum and matures in January 2025. At ~~September 30, 2022,~~March 31, 2023, there was $348.0 million outstanding on this facility and ~~$1.1~~$0.1 million in unamortized deferred financing costs.

In August 2017, the Company established the GMSR Trust to finance Ginnie Mae mortgage servicing rights owned by the Company through issuance of either variable funding notes or term notes, in each case secured by participation certificates held by the GMSR Trust. As of ~~September 30, 2022,~~March 31, 2023, the Company had pledged participation certificates representing beneficial interests in Ginnie Mae mortgage servicing rights to the GMSR Trust with a fair value of ~~$527.1~~$553.2 million. At ~~September 30,~~

~~2022~~March 31, 2023 the maximum borrowing capacity of the variable funding notes was $200.0 million. The variable funding notes bear interest at SOFR plus a margin per annum and mature in May 2023. As of ~~September 30, 2022,~~March 31, 2023, there were ~~$116.9~~$126.9 million in variable funding notes outstanding to finance Ginnie Mae mortgage servicing rights owned by the Company.

Securities Financing Facilities

The Company has entered into master repurchase agreements to finance retained interest securities related to its securitizations. ~~The~~Each of the securities financing facilities ~~have an advance rate between 60%~~has a 90 day term and ~~90% based on classes of the securities and accrue~~accrues interest at a rate of 90-day SOFR, plus a margin. The securities financing facilities have an advance rate between 50% and 90% based on classes of the securities and are secured by ~~the~~ trading securities which represent our retained interests in the credit risk of the assets collateralizing certain securitization transactions. As of ~~September 30, 2022,~~March 31, 2023, the trading securities had a fair value of ~~$97.2~~$95.6 million on the consolidated balance sheets and there were ~~$93.3~~$86.6 million in securities financing facilities outstanding.

Servicing Advance Facilities

In September 2020, the Company, through its indirect-wholly owned subsidiary loanDepot Agency Advance Receivables Trust (the “Advance Receivables Trust”), entered into a variable funding note facility for the financing of servicing advance receivables with respect to residential mortgage loans serviced by it on behalf of Fannie Mae and Freddie Mac. Pursuant to an indenture, the Advance Receivables Trust can issue up to $100.0 million in variable funding notes (the “2020-VF1 Notes”). The 2020-VF1 Notes accrue interest at SOFR, plus a margin per annum and mature in September 2023 (unless earlier redeemed in accordance with their terms). At ~~September 30, 2022,~~March 31, 2023, there was ~~$15.7~~$20.2 million in 2020-VF1 Notes outstanding.

In November 2021, the Company, through the GMSR Trust issued variable funding notes secured by principal and interest advance receivables and servicing advance receivables with respect to residential mortgage loans serviced on behalf of Ginnie Mae. The variable funding notes bear interest at SOFR plus a margin per annum and mature in May 2023. As of ~~September 30, 2022,~~March 31, 2023, there was ~~$15.1~~$30.1 million outstanding on the variable funding ~~notes and $0.2 million in unamortized deferred financing costs.~~notes.

Term Notes

In October 2018, the Company, through the GMSR Trust issued the Series 2018-GT1 Term Notes (“Term Notes”). The Term Notes accrue interest at 30-day LIBOR, or other alternative base rate such as SOFR, plus a margin per annum and

mature in October 2023 or, if extended pursuant to the terms of the related indenture supplement, October 2025 (unless earlier redeemed in accordance with their terms). At ~~September 30, 2022,~~March 31, 2023, there was $200.0 million in Term Notes outstanding and ~~$0.5~~$0.2 million in unamortized deferred financing costs.

Senior Notes

In October 2020, the Company issued $500.0 million in aggregate principal amount of 6.50% senior unsecured notes due 2025, (the “2025 Senior Notes”). The 2025 Senior Notes will mature on November 1, 2025. Interest on the 2025 Senior Notes accrues at a rate of 6.50% per annum, payable semi-annually in arrears on May 1 and November 1 of each year. The Company may redeem the 2025 Senior Notes, in whole or in part, at various redemption prices. At ~~September 30, 2022,~~March 31, 2023, there was $500.0 million in 2025 Senior Notes outstanding and ~~$5.5~~$4.6 million in unamortized deferred financing costs.

In March 2021, the Company issued $600.0 million in aggregate principal amount of 6.125% senior unsecured notes due 2028 (the “2028 Senior Notes” and together with the 2025 Senior Notes, the "Senior Notes"). The 2028 Senior Notes will mature on April 1, 2028. Interest on the 2028 Senior Notes accrues at a rate of 6.125% per annum, payable semi-annually in arrears on April 1 and October 1 of each year. At any time prior to April 1, 2024, the Company may redeem some or all of the 2028 Senior Notes at a price equal to 100% of the principal amount of the 2028 Senior Notes, plus accrued and unpaid interest, if any, to, but not including, the date of redemption plus a make-whole premium. During the first quarter of 2022, the Company repurchased $97.5 million of 2028 Senior Notes at an average purchase price of 87.9% of par which resulted in a $10.5 million gain on extinguishment of debt recorded in other interest expense on the consolidated statement of operations. The Company

may also redeem the 2028 Senior Notes, in whole or in part, at any time on or after April 1, 2024 at various redemption prices. In addition, subject to certain conditions at any time prior to April 1, 2024, the Company may redeem up to 40% of the principal amount of the 2028 Senior Notes with the proceeds of certain equity offerings at a redemption price of 106.125% of the principal amount of the 2028 Senior Notes, together with accrued and unpaid interest, if any, to, but not including, the date of redemption. At ~~September 30, 2022,~~March 31, 2023, there was $502.5 million in 2028 Senior Notes outstanding and ~~$5.8~~$5.3 million in unamortized deferred financing costs.

Interest Expense

Interest expense on all outstanding debt obligations with variable rates is paid based on ~~LIBOR,~~SOFR, or other alternative base rate, ~~such as SOFR,~~ plus a margin ranging from ~~0.70%~~0.80% - 3.50%.

NOTE 10 – EQUITY

The Company consolidates the financial results of LD Holdings and reports noncontrolling interest related to the interests held by the Continuing LLC Members. The noncontrolling interest of $437.3 million and $488.0 million as of March 31, 2023 and December 31, 2022, respectively, represented the economic interest in LD Holdings held by the Continuing LLC Members. The Continuing LLC Members have the right to exchange one Holdco Unit and one share of Class B common stock or Class C common stock, as applicable, together for cash or one share of Class A common stock at the Company’s election, subject to customary conversion rate adjustments for stock splits, stock dividends, and reclassifications. As Continuing LLC Members convert shares, noncontrolling interest is adjusted to proportionately reduce the economic interest

in LD Holdings with an offset to additional paid-in-capital on the consolidated statements of equity. The following table summarizes the ownership of LD Holdings as of March 31, 2023 and December 31, 2022.


	March 31, 2023		December 31, 2022
Holding Member Interests:	Holdco Units	Ownership Percentage	Holdco Units	Ownership Percentage
loanDepot, Inc.	172,127,841	54.28%	169,523,682	53.78%
Continuing LLC Members	144,983,025	45.72%	145,693,119	46.22%
Total	317,110,866	100.00%	315,216,801	100.00%

NOTE 11 – EARNINGS (LOSS) PER SHARE

Basic earnings (loss) per share of Class A common stock and Class D common stock is computed by dividing net income (loss) attributable to loanDepot, Inc. by the weighted-average number of shares of Class A common stock and Class D common stock, respectively, outstanding during the period. Diluted earnings (loss) per share of Class A common stock and Class D common stock is computed by dividing net income (loss) attributable to loanDepot, Inc. by the weighted-average number of shares of Class A common stock and Class D common stock respectively, outstanding adjusted to give effect to potentially dilutive securities.

There was no Class B common stock outstanding as of March 31, 2023 or 2022. The following table sets forth the calculation of basic and diluted earnings (loss) per share for Class A common stock and Class D common stock:


	Three Months Ended
	March 31, 2023
	Class A		Class D		Total


Net loss attributable to loanDepot, Inc.	$	(18,534)	$	(24,373)	$	(42,907)





Weighted average shares - basic	73,783,147		97,026,671		170,809,818

Loss per share - basic	$	(0.25)	$	(0.25)	$	(0.25)

Diluted loss per share:



Net loss allocated to common stockholders - diluted	$	(18,534)	$	(24,373)	$	(42,907)





Weighted average shares - diluted	73,783,147		97,026,671		170,809,818

Loss per share - diluted	$	(0.25)	$	(0.25)	$	(0.25)


	Three Months Ended
	March 31, 2022
	Class A		Class D		Total


Net loss attributable to loanDepot, Inc.	$	(10,367)	$	(24,374)	$	(34,741)





Weighted average shares - basic	41,480,725		97,527,165		139,007,890

Loss per share - basic	$	(0.25)	$	(0.25)	$	(0.25)

Diluted loss per share:



Net loss allocated to common stockholders - diluted	$	(10,367)	$	(24,374)	$	(34,741)





Weighted average shares - diluted	41,480,725		97,527,165		139,007,890

Loss per share - diluted	$	(0.25)	$	(0.25)	$	(0.25)

For the three months ended March 31, 2023 and March 31, 2022, 149,210,417 and 181,035,804 shares of Class C common stock were evaluated for the assumed exchange of noncontrolling interests and determined to be anti-dilutive, and thus were excluded from the computation of diluted loss per share.

For the three months March 31, 2023, 21,470,046 of Class A RSUs, nonqualified stock options, and ESPP shares were determined to be anti-dilutive, and thus excluded from the computation of diluted loss per share. For the three months ended March 31, 2022 and 2,608,518 of Class A RSUs were determined to be anti-dilutive, and thus excluded from the computation of diluted loss per share.

NOTE 12 – INCOME TAXES

The Company’s income tax expense varies from the expense that would be expected based on statutory rates due principally to its organizational structure. ~~As part of the completion of the IPO, the Company became a C Corporation subject to federal, state, and local income taxes with respect to its share of net taxable income of LD Holdings.~~

As of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, the Company had a deferred tax asset before any valuation allowance of ~~$0.1~~$127.2 million and ~~$0.4~~$70.5 million, respectively, and a deferred tax liability of ~~$135.2~~$230.4 million and ~~$193.4~~$191.6 million, respectively. Deferred income taxes arise from temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements, which will result in taxable or deductible amounts in the future. The deferred tax liability as of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021 relate~~2022 relates to temporary differences in the book basis as compared to the tax basis of loanDepot, Inc.’s investment in LD Holdings, net of tax benefits from future deductions for payments made under a Tax Receivable Agreement (“TRA”) as a result of the IPO. Changes in tax laws and rates may affect recorded deferred tax assets and liabilities and the Company’s effective tax rate in the future. Deferred income taxes are measured using the applicable tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on the tax rates that have been enacted at the reporting date. The Company measured its deferred tax assets and liabilities at ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022 using the combined federal and state rate (less federal benefit) of ~~26%~~27.3%. The Company establishes a valuation allowance when it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized. As of ~~September 30, 2022,~~March 31, 2023, the Company had a valuation allowance of deferred tax assets $0.4 million on tax credits that have limited carryforward periods and may expire prior to the Company being able to utilize them. The Company did not ~~have~~establish a valuation allowance ~~on any~~for remaining deferred tax assets as the Company believes it is more-likely-than-not that the Company will realize the benefits of the deferred tax assets. The Company recognized a TRA liability of ~~$47.8~~$52.1 million and ~~$32.9~~$50.7 million as of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, respectively, which represents the Company’s estimate of the aggregate amount that it will pay under the TRA, refer to Note ~~15-~~14- Commitments and Contingencies, for further information on the TRA liability.

NOTE 1213 – RELATED PARTY TRANSACTIONS

In conjunction with its joint ventures, the Company entered into agreements to provide services to the joint ventures for which it receives and pays fees. ~~Such services include~~Services for which the Company earns fees comprise of loan processing and administrative services (legal, accounting, human resources, data processing and management information, assignment processing, post-closing, underwriting, facilities management, quality control, management consulting, risk management, promotions, public relations, advertising and compliance with credit agreements). The Company also originates eligible mortgage loans referred by its joint ventures for which the Company pays the joint ventures a broker ~~fee for referrals of eligible mortgage loans.~~fee.

~~Fees earned, costs incurred, and amounts payable to or receivable from joint ventures were as follows:~~

Three Months Ended
September 30, Nine Months Ended
September 30,
2022 2021 2022 2021
Loan processing and administrative services fee income $ 4,876 $ 3,650 $ 12,754 $ 10,757
Loan origination broker fees expense $ 31,917 $ 22,749 $ 81,843 $ 63,457

September 30,
2022 December 31,
2021
Amounts (payable) receivable from joint ventures $ (8,136) $ 1,855

The Company paid management fees to a shareholder of the Company of $0.2 million during the nine months ended September 30, 2021. The Company employed certain individuals who provided services to a shareholder whose salaries totaled $0.2 million during the nine months ended September 30, 2022 and $0.1 million and $0.3 million during three and nine months ended September 30, 2021, respectively.

~~NOTE 13 – EQUITY~~

The Continuing LLC Members have the right to exchange one Holdco Unit and one share of Class B common stock or Class C common stock, as applicable, together for cash or one share of Class A common stock at the Company’s election, subject to customary conversion rate adjustments for stock splits, stock dividends, and reclassifications. The Company consolidates the financial results of LD Holdings and reports noncontrolling interest related to the interests held by the Continuing LLC Members.

The noncontrolling interest of $0.6 billion and $1.1 billion as of September 30, 2022 and December 31, 2021, respectively, represented the economic interest in LD Holdings held by the Continuing LLC Members. As Continuing LLC Members convert shares, noncontrolling interest is adjusted to proportionately reduce the economic interest in LD Holdings with an offset to additional paid-in-capital on the consolidated statements of equity. The following table summarizes the ownership of LD Holdings as of September 30, 2022.

Holding Member Interests: Holdco Units Ownership Percentage
loanDepot, Inc. 165,002,738 52.53%
Continuing LLC Members 149,130,538 47.47%
Total 314,133,276 100.00%

~~NOTE 14 – EARNINGS (LOSS) PER SHARE~~

The basic and diluted earnings per share period for the nine months ended September 30, 2021 represents the period after February 11, 2021, wherein the Company had outstanding Class A common stock and Class D common stock. There was no Class B common stock outstanding as of September 30, 2022 and 2021. The following table sets forth the calculation of basic and diluted earnings (loss) per share for Class A common stock and Class D common stock:

3025

Fees earned, costs incurred, and amounts payable to joint ventures were as follows:


	Three Months Ended March 31,
	2023		2022
Loan processing and administrative services fee income	$	4,177	$	3,330
Loan origination broker fees expense	26,786		20,129

Three Months Ended Nine Months Ended
September 30, 2022 September 30, 2022
Class A Class D Total Class A Class D Total
Net loss attributable to loanDepot, Inc. $ (24,200) $ (35,881) $ (60,081) $ (70,421) $ (125,330) $ (195,750)
Weighted average shares - basic 65,437,698 97,026,671 162,464,369 54,611,035 97,192,893 151,803,928
Loss per share - basic $ (0.37) $ (0.37) $ (0.37) $ (1.29) $ (1.29) $ (1.29)
Diluted loss per share:
Net loss allocated to common stockholders - diluted $ (24,200) $ (35,881) $ (60,081) $ (70,421) $ (125,330) $ (195,751)
Weighted average shares - diluted 65,437,698 97,026,671 162,464,369 54,611,035 97,192,893 151,803,928
Loss per share - diluted $ (0.37) $ (0.37) $ (0.37) $ (1.29) $ (1.29) $ (1.29)


	March 31, 2023		December 31, 2022
Amounts payable to joint ventures	$	(6,549)	$	(9,776)

Three Months Ended Nine Months Ended
September 30, 2021 September 30, 2021
Class A Class D Total Class A Class D Total
Net income attributable to loanDepot, Inc. $ 6,052 $ 45,423 $ 51,475 $ 9,233 $ 95,678 $ 104,911
Weighted average shares - basic 15,318,921 114,978,644 130,297,565 11,259,896 116,681,435 127,941,331
Earnings per share - basic $ 0.40 $ 0.40 $ 0.40 $ 0.82 $ 0.82 $ 0.82
Diluted income per share:
Net income allocated to common stockholders - diluted $ 6,052 $ 45,423 $ 51,475 $ 9,233 $ 95,678 $ 104,911
Weighted average shares - diluted 15,318,921 114,978,644 130,297,565 11,259,896 116,681,435 127,941,331
Earnings per share - diluted $ 0.40 $ 0.40 $ 0.40 $ 0.82 $ 0.82 $ 0.82

~~For the three~~The Company has entered into a TRA with Parthenon Stockholders and ~~nine months ended September 30, 2022, 156,677,534 and 167,796,888 shares of Class C common stock~~certain Continuing LLC Members. There were ~~evaluated for the assumed exchange of noncontrolling interests and determined to be anti-dilutive, and thus were excluded from the computation of diluted loss per share.~~

For the three and nine months ended September 30, 2022, 14,869,764 and 12,907,024 of Class A RSUs and nonqualified stock options were determined to be anti-dilutive, and thus excluded from the computation of diluted loss per share.

~~For~~no payments made during the three months ended September 30, 2021, 191,579,524 shares of Class C common stock were evaluated for the assumed exchange of noncontrolling interests and determined to be anti-dilutive, and thus were excluded from the computation of diluted earnings per share. For the period from February 11, 2021 to September 30, 2021, 195,111,599 shares of Class C common stock were evaluated for the assumed exchange of noncontrolling interests and determined to be anti-dilutive, and thus were excluded from the computation of diluted earnings per share.

~~For~~March 31, 2023 or the three months ended September 30, 2021, 1,405,281 of RSUs were determined to be anti-dilutive, and thus excluded from the computation of diluted earnings per share. For the period from February 11, 2021 to September 30, 2021, 1,008,758 of RSUs were determined to be anti-dilutive, and thus excluded from the computation of diluted earnings per share.March 31, 2022.

NOTE ~~15–~~14– COMMITMENTS AND CONTINGENCIES

Escrow Services

In conducting its operations, the Company, through its wholly-owned subsidiaries, LDSS and ACT, routinely hold customers' assets in escrow pending completion of real estate financing transactions. These amounts are maintained in segregated bank accounts and are offset with the related liabilities resulting in no amounts reported in the accompanying consolidated balance sheets. The balances held for the Company’s customers totaled ~~$8.0~~$3.6 million and ~~$21.1~~$5.1 million at ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, respectively.

Legal Proceedings

The Company is a defendant in, or a party to, legal actions and proceedings that arise in the ordinary course of business. In some of these actions and proceedings, claims for monetary damages are asserted against the Company. These matters include actions alleging improper lending practices, improper servicing, quiet title actions, improper foreclosure practices, violations of consumer protection laws, etc. and on account of consumer bankruptcies. In many of these actions, the Company may not be the real party of interest (because the Company is not the servicer of the loan or the holder of the note) but it may appear in the pleadings because it is in the chain of title to property over which there may be a dispute. Such matters may be indemnified and managed by the appropriate party, which may be the Company’s subservicer or a former subservicer. In other cases, such as lien avoidance cases brought in bankruptcy, the Company is insured by title insurance, and the case is turned over to the title insurer who tenders the Company’s defense. In some of these actions and proceedings, claims for monetary damages are asserted against the Company. In view of the inherent difficulty of predicting the outcome of such legal actions and proceedings, the Company generally cannot predict what the eventual outcome of the pending matters will be, what the timing of the ultimate resolution of these matters will be, or what the eventual loss related to each pending matter may be, if any.

The Company seeks to resolve all litigation and regulatory matters in the manner management believes is in the best interest of the Company and contests liability, allegations of wrongdoing, and, where applicable, the amount of damages or scope of any penalties or other relief sought as appropriate in each pending matter. On at least a quarterly basis, the Company assesses its liabilities and contingencies in connection with outstanding legal and regulatory proceedings utilizing the latest information available. Any estimated loss is subject to significant judgment and is based upon currently available information, a variety of assumptions, and known and unknown uncertainties. Where available information indicates that it is probable a liability has been incurred and the Company can reasonably estimate the amount of the loss, an accrued liability is established. The actual costs of resolving these proceedings may be substantially higher or lower than the amounts accrued.

Employment Litigation

On December 24, 2020, the Company received a demand letter from one of the senior members of its operations team alleging, among other things, loan origination noncompliance and various employment related claims, including hostile work environment and gender discrimination, with unspecified damages. The executive has since resigned her position with the

Company. ~~The parties participated in pre-litigation mediation in May 2021. The parties did not resolve the matter at mediation and a~~On September 21, 2021, Plaintiff filed her complaint ~~was filed~~led with the Superior Court of the State of California, County of Orange ~~on September 21, 2021~~ and an amended complaint was filed on December 21, 2021. ~~In response,~~Following some motion practice, on February 2, 2022 the Company filed a demurrer to the complaint with the Superior Court of the State of California, County of Orange, for failing to state facts sufficient to constitute a cause of action while still vigorously denying the claims within the complaint. On March 24, 2022, the plaintiff filed her opposition to loanDepot’s demurrer. On March 29, 2022, the Company filed its reply to Plaintiff’s opposition. A hearing was held on the Company’s demurrer on May 12, 2022, at the Superior Court of the State of California, County of Orange. The court sustained the Company’s demurrer in full. On June 30, 2022, the Company filed its answer and affirmative defenses to the amended complaint. The Company deposed the Plaintiff and anticipates filing its Motion for Summary Judgment, or in the Alternative, Summary Adjudication on or before May 17, 2023. The plaintiff seeks damages in excess of $75 million. The Company believes this lawsuit is without merit ~~and intends~~continues to vigorously defend against it. Discovery in this matter is still ongoing.

While the Company’s management does not believe these allegations have merit, defending such allegations ~~could~~has resulted in and will likely continue to result in substantial costs and a diversion of management’s attention and resources.

The ultimate outcome of the other legal proceedings is uncertain, and the amount of any future potential loss is not considered probable or estimable. The Company will incur defense costs and other expenses in connection with these legal proceedings. If the final resolution of any legal proceedings is unfavorable, it could have a material adverse effect on the Company’s business and financial condition.

Based on the Company’s current understanding of these pending legal actions and proceedings, management does not believe that judgments or settlements arising from pending or threatened legal matters, individually or in the aggregate, will have a material adverse effect on the consolidated financial position, operating results or cash flows of the Company. However, unfavorable resolutions could affect the consolidated financial position, results of operations or cash flows for the years in which they are resolved.

Regulatory Requirements

The Company is subject to various capital requirements by the U.S. Department of Housing and Urban Development (“HUD”); lenders of the warehouse lines of credit; and secondary markets investors. Failure to maintain minimum capital requirements could result in the inability to participate in HUD-assisted mortgage insurance programs, to borrow funds from warehouse line lenders or to sell or service mortgage loans. As of ~~September 30, 2022,~~March 31, 2023, the Company was in compliance with its selling and servicing capital requirements.

Commitments to Extend Credit

The Company enters into IRLCs with customers who have applied for residential mortgage loans and meet certain credit and underwriting criteria. These commitments expose the Company to market risk if interest rates change and the loan is not economically hedged or committed to an investor. The Company is also exposed to credit loss if the loan is originated and not sold to an investor and the customer does not perform. The collateral upon extension of credit typically consists of a first deed of trust in the mortgagor’s residential property. Commitments to originate loans do not necessarily reflect future cash requirements as some commitments are expected to expire without being drawn upon. Total commitments to originate loans as of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022 approximated ~~$4.8~~$3.2 billion and ~~$12.7~~$2.2 billion, respectively. These loan commitments are treated as derivatives and are carried at fair value, refer to Note 6-5- Derivative Financial Instruments and Hedging Activities for further information on derivatives.

Loan Loss Obligation for Sold Loans

When the Company sells mortgage loans, it makes customary representations and warranties to the purchasers about various characteristics of each loan such as the origination and underwriting guidelines, including but not limited to the validity of the lien securing the loan, property eligibility, borrower credit, income and asset requirements, and compliance with applicable federal, state and local law. The Company establishes a loan repurchase reserve for losses associated with repurchase loan obligations if the Company breached a representation or warranty given to the loan purchaser. Additionally, the Company’s loan loss obligation for sold loans includes an estimate for losses associated with early payoffs and early payment defaults. There have been charge-offs associated with early payoffs, early payment defaults and losses related to representations, warranties, and other provisions for the three ~~and nine~~ months ended ~~September 30, 2022 and 2021.~~March 31, 2023.

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The activity related to the loan loss obligation for sold loans is as follows:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021		2022		2021			2023		2022
Balance at beginning of period	Balance at beginning of period	$	85,873	$	26,626	$	29,877	$	33,591	Balance at beginning of period	$	70,797	$	29,877
Provision for loan loss obligations	Provision for loan loss obligations	12,932		2,456		108,550		2,723		Provision for loan loss obligations	9,674		13,246
Charge-offs	Charge-offs	(29,879)		(2,094)		(69,501)		(9,326)		Charge-offs	(14,801)		(1,964)
Balance at end of period	Balance at end of period	$	68,926	$	26,988	$	68,926	$	26,988	Balance at end of period	$	65,670	$	41,159

Obligation for Sold MSRs

The Company recognizes sales of mortgage servicing rights as sales if title passes, if substantially all risks and rewards of ownership have irrevocably passed to the purchaser, and any protection provisions retained by the Company are minor and can be reasonably estimated. If a sale is recognized and only minor protection provisions exist, a liability for the estimated obligation associated with those provisions is recorded in accounts payable, accrued expenses and other liabilities on the consolidated balance sheet. The Company establishes a reserve related to the reimbursement of the purchase price for any loans that are prepaid in full within 90 days of the MSR sale transaction. The obligation for sold MSRs was ~~$6.5~~$0.8 million and ~~$0.4~~$1.1 million as of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021, respectively~~2022, respectively.

TRA Liability

As part of the IPO and reorganization, the Company entered into a TRA with Parthenon Stockholders and certain Continuing LLC Members, whereby loanDepot, Inc. will be obligated to pay such parties or their permitted assignees, 85% of the amount of cash tax savings, if any, in U.S. federal, state, and local taxes that loanDepot, Inc. realizes, or is deemed to realize as a result of future tax benefits from increases in tax basis. The TRA liability is accounted for as a contingent liability with amounts accrued when deemed probable and estimable. The Company recognized a TRA liability of ~~$47.8~~$52.1 million and ~~$32.9~~$50.7 million as of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, respectively, which represents the Company’s estimate of the aggregate amount that it will pay under the TRA as a result of the offering transaction. ~~The amounts payable under the TRA will vary depending on a number of factors, such as the amount and timing of taxable income attributable to loanDepot, Inc.~~

NOTE 1615 – REGULATORY CAPITAL AND LIQUIDITY REQUIREMENTS

The Company, through certain subsidiaries, is required to maintain minimum net worth, liquidity and other financial requirements specified in certain of its selling and servicing agreements, including:

•Ginnie Mae single-family issuers. The eligibility requirements include net worth of $2.5 million plus 0.35% of outstanding Ginnie Mae single-family obligations and a liquidity requirement equal to the greater of $1.0 million or 0.10% of outstanding Ginnie Mae single-family securities.

•Fannie Mae and Freddie Mac. The eligibility requirements for seller/servicers include tangible net worth of $2.5 million plus 0.25% of the Company’s total single-family servicing portfolio, excluding loans subserviced for others

and a liquidity requirement equal to 0.035% of the aggregate UPB serviced for the agencies plus 2.0% of total nonperforming agency servicing UPB in excess of 6%.

•HUD. The eligibility requirements include a minimum adjusted net worth of $1.0 million plus 1% of the total volume in excess of $25.0 million of FHA Single Family Mortgages originated, underwritten, serviced, and/or purchased during the prior fiscal year, up to a maximum required adjusted net worth of $2.5 million.

•Fannie Mae, Freddie Mac and Ginnie Mae. The Company is also required to hold a ratio of Adjusted/Tangible Net Worth to Total Assets greater than 6%.

To the extent that these requirements are not met, the Company may be subject to a variety of regulatory actions which could have a material adverse impact on our results of operations and financial condition. The most restrictive of the minimum net worth and capital requirements require the Company to maintain a minimum adjusted net worth balance of ~~$125.3~~$132.0 million

as of ~~September 30, 2022.~~March 31, 2023. The Company was in compliance with the net worth, liquidity and other financial requirements of its selling and servicing requirements as of ~~September 30, 2022.~~March 31, 2023.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion provides an analysis of the Company's financial condition, cash flows and results of operations from management's perspective and should be read in conjunction with our consolidated financial statements and the accompanying notes included under Part I. Item 1 of this report. The results of operations described below are not necessarily indicative of the results to be expected for any future periods. This discussion includes forward-looking information that involves risks and assumptions which could cause actual results to differ materially from management’s expectations. See our cautionary language at the beginning of this report under “Special Note Regarding Forward-Looking Statements” and for a more complete discussion of the factors that could affect our future results refer to Part II. “Item 1A. Risk Factors” and elsewhere in this Form 10-Q and Part I, Item 1A "Risk Factors" in our ~~2021~~2022 Form 10-K. Capitalized terms used but not otherwise defined herein have the meanings set forth in the our Form 10-K.

Overview

~~loanDepot is~~We are a customer-centric, ~~and technology-enabled~~technology-empowered residential mortgage platform. ~~We launched our business in 2010~~Our goal is to ~~provide mortgage loan solutions to~~be the lender of choice for consumers ~~who were dissatisfied with~~and the ~~services offered~~employer of choice by ~~banks~~being a company that operates on sound principles of exceptional value, ethics, and ~~other traditional market participants.~~transparency. Since our inception, we have significantly expanded our origination platform ~~both in terms of size and capabilities.~~as well as developed an in-house servicing platform. Our primary sources of revenue are derived from the origination of conventional and government mortgage loans, servicing conventional and government mortgage loans, and providing ~~a growing suite of~~ ancillary services.

The Company's common stock began trading on the New York Stock Exchange on February 11, 2021 under the ticker symbol "LDI." The initial public offering consisted of 3,850,000 shares of Class A common stock, $0.001 par value per share, at an offering price of $14.00 per share, pursuant to a Registration Statement on Form S-1.

A summary of our critical accounting policies and estimates is included in Critical Accounting Policies and Estimates.

Key Factors Influencing Our Results of Operations

Market and Economic Environment

The consumer lending market and the associated loan origination volumes for mortgage loans are influenced by interest rates and economic conditions. While borrower demand for consumer credit has typically remained strong in most economic environments, general market conditions, including the interest rate environment, unemployment rates, home price appreciation and consumer confidence may affect borrower willingness to seek financing and investor desire and ability to invest in loans. For example, a significant interest rate increase or rise in unemployment could cause potential borrowers to defer seeking financing as they wait for interest rates to stabilize or the general economic environment to improve. Additionally, if the economy weakens and actual or expected default rates increase, loan investors may postpone or reduce their investments in loan products.

The volume of mortgage loan originations associated with home purchases is generally affected by broader economic factors as well as the overall strength of the economy, housing prices, and interest rate fluctuations. Increases in interest rates may affect affordability and the ability for potential home buyers to qualify for a mortgage loan. Purchase mortgage loan origination volume can be subject to seasonal trends as home sales typically rise during the spring and summer seasons and decline in the fall and winter seasons. This is somewhat offset by purchase loan originations sourced from our joint ventures which experience their highest level of activity during November and December as home builders focus on completing and selling homes prior to year-end. Seasonality has less of an impact on mortgage loan refinancing volumes, which are primarily driven by fluctuations in mortgage loan interest rates.

~~Fluctuations in~~ Interest Rates

Our mortgage loan refinancing volumes (and to a lesser degree, our purchase volumes), balance sheets, and results of operations are influenced by changes in interest rates and how we effectively manage the related interest rate risk. As interest rates decline, mortgage loan refinance volumes tend to increase, while an increasing interest rate environment may cause a decrease in refinance volumes and purchase volumes. In addition, the majority of our assets are subject to interest rate risk, including LHFS, IRLCs, servicing rights and mandatory trades, forward sales contracts, interest rate swap futures and put

options. We refer to such mandatory trades, forward sales contracts, interest rate swap futures and put options collectively as “Hedging Instruments.” As interest rates increase, our LHFS and IRLCs generally decrease in value while our Hedging Instruments utilized to hedge against interest rate risk typically increase in value. Rising interest rates cause our expected

mortgage loan servicing revenues to increase due to a decline in mortgage loan prepayments which extends the average life of our servicing portfolio and increases the value of our servicing rights. Conversely, as interest rates decline, our LHFS and IRLCs generally increase in value while our Hedging Instruments decrease in value. In a declining interest rate environment, borrowers tend to refinance their mortgage loans, which increases prepayment speed and causes our expected mortgage loan servicing revenues to decrease, which reduces the average life of our servicing portfolio and decreases the value of our servicing rights. The changes in fair value of our servicing rights are recorded as unrealized gains and losses in changes in fair value of servicing rights, net, in our consolidated statements of operations.

As interest rates increase, rate and term refinancings become less attractive to consumers. However, rising interest rates during periods of inflationary pressures can make real assets, including real estate, an attractive investment. Demand for real estate may result in ongoing support for purchase mortgages and increasing home price appreciation creating borrower equity that may result in increasing opportunities for cash-out refinancings or home equity loans.

Current Market Conditions

In ~~November 2022~~March 2023, the Federal Reserve raised the Federal Funds rate by another ~~0.75~~0.25 percentage points for a total increase of ~~3.75~~4.75 percentage points since the beginning of 2022. The resulting increase in mortgage interest rates ~~have~~has impacted mortgage transaction volumes, which are expected to continue to decline ~~through 2023. According~~for 2023 relative to MBA’s Mortgage Finance Forecast published October 23, 2022, annual one-to-four family residential mortgage origination volumes are expected to decrease by $0.2 trillion, or 9% to $2.0 trillion by December 31, 2023. The primary driver of this decrease is refinance volume.

2022. As a result of ~~current~~ market conditions, in July 2022 we ~~have implemented~~announced our Vision 2025 ~~Plan, the~~plan. The plan’s four primary elements ~~include:~~included: 1) Increase focus on purchase transactions while serving increasingly diverse communities across the country; 2) Execute previously announced growth-generating initiatives; 3) Centralize management of loan originations and loan fulfillment to enhance quality and effectiveness; and 4) ~~Right-size~~Aggressively rightsize our cost structure. During the ~~third quarter~~second half of 2022 we ~~reduced~~consolidated our ~~real estate footprint which resulted in a $9.1 million lease impairment~~retail and ~~$11.0 million loss on disposal of fixed assets. We reduced our quarterly operating expenses including personnel and marketing related costs~~corporate locations and completed the exit of our wholesale business. ~~We have substantially~~During the first quarter of 2023 we completed the transition of our servicing portfolio to our in-house platform ~~and we recently began~~lowering our servicing expense, expanded the ~~initial launch of~~offerings on our digital HELOC ~~solution. In~~platform, and announced a new partnership with ~~National HomeCorp., a Georgia-based homebuilder specializing in affordable single-family homes, we formed NHC Mortgage, a new joint venture partnership advancing our goal of purpose-driven lending~~Habitat for Humanity to support the organization's mission to help families build and ~~providing credit~~improve places to ~~underserved communities.~~call home.

Key Performance Indicators

We manage and assess the performance of our business by evaluating a variety of metrics. Selected key performance metrics include loan originations and sales and servicing metrics.

Loan Origination and Sales

Loan originations and sales by volume and units are a measure of how successful we are at growing sales of mortgage loan products and a metric used by management in an attempt to isolate how effectively we are performing. We believe that originations and sales are an indicator of our market penetration in mortgage loans and that this provides useful information because it allows investors to better assess the strength of our core business. Loan originations and sales include brokered loan originations not funded by us. We enter into IRLCs to originate loans, at specified interest rates, with customers who have applied for a mortgage and meet certain credit and underwriting criteria. We believe the volume of our IRLCs is another measure of our overall market share.

Gain on sale margin represents the total of (i) gain on origination and sale of loans, net, and (ii) origination income, net, divided by loan origination volume during period.

Pull through weighted gain on sale margin represents the total of (i) gain on origination and sale of loans, net, and (ii) origination income, net, divided by the pull through weighted rate lock volume. Pull through weighted rate lock volume is the unpaid principal balance of loans subject to interest rate lock commitments, net of a pull-through factor for the loan funding probability.

Servicing Metrics

Servicing metrics include the unpaid principal balance of our servicing portfolio and servicing portfolio units, which represent the number of mortgage loan customers we service. We believe that the net additions to our portfolio and number of units are indicators of the growth of our mortgage loans serviced and our servicing income, but may be offset by sales of servicing rights.

Three Months Ended
September 30, Nine Months Ended
September 30,
(Dollars in thousands) 2022 2021 2022 2021
Financial statement data
Total revenue $ 274,192 $ 923,756 $ 1,086,141 $ 3,019,678
Total expenses 435,125 744,771 1,602,038 2,364,054
Net (loss) income (137,482) 154,277 (452,623) 608,414
(Loss) earnings per share of Class A and Class D common stock:
Basic $ (0.37) $ 0.40 $ (1.29) $ 0.82
Diluted $ (0.37) $ 0.40 $ (1.29) $ 0.82
Non-GAAP financial measures(1)
Adjusted total revenue $ 249,663 $ 948,770 $ 1,027,540 $ 3,015,540
Adjusted net (loss) income (116,846) 147,533 (367,101) 524,564
Adjusted (LBITDA) EBITDA (114,133) 238,261 (380,049) 805,622
Adjusted diluted (loss) earnings per share N/A N/A N/A N/A
Loan origination and sales
Loan originations by channel:
Retail $ 6,331,564 $ 24,938,035 $ 33,688,829 $ 86,247,597
Partner 3,518,363 7,047,770 13,706,884 21,711,525
Total $ 9,849,927 $ 31,985,805 $ 47,395,713 $ 107,959,122
Loan originations by purpose:
Purchase $ 6,938,408 $ 11,008,399 $ 24,469,338 $ 29,307,875
Refinance 2,911,519 20,977,406 22,926,375 78,651,247
Total $ 9,849,927 $ 31,985,805 $ 47,395,713 $ 107,959,122
Loan originations (units) 29,795 94,799 142,057 306,352
Licensed loan officers:
Retail 2,096 3,081 2,096 3,081
Partner 223 280 223 280
Total 2,319 3,361 2,319 3,361
Loans sold:
Servicing retained $ 6,604,979 $ 26,520,547 $ 34,296,344 $ 94,937,638
Servicing released 5,132,350 5,672,551 18,220,561 11,474,587
Total $ 11,737,329 $ 32,193,098 $ 52,516,905 $ 106,412,225
Loans sold (units) 34,613 95,735 154,624 302,764

3831


		Three Months Ended September 30,						Nine Months Ended September 30,							Three Months Ended March 31,
(Dollars in thousands)	(Dollars in thousands)	2022			2021			2022			2021			(Dollars in thousands)	2023			2022

Loan originations by purpose:														Loan originations by purpose:
Purchase														Purchase	$	3,512,771		$	8,030,766
Refinance														Refinance	1,431,566			13,519,965
Total loan originations														Total loan originations	$	4,944,337		$	21,550,731
Loan originations (units)														Loan originations (units)	16,338			64,951

Licensed loan officers														Licensed loan officers	1,716			3,261
Loans sold:														Loans sold:
Servicing retained														Servicing retained	$	3,277,707		$	17,122,716
Servicing released														Servicing released	2,118,874			5,745,322
Total loans sold														Total loans sold	$	5,396,581		$	22,868,038
Loans sold (units)														Loans sold (units)	17,218			68,149
Gain on sale margin	Gain on sale margin	1.80		%	2.84		%	1.66		%	2.71		%	Gain on sale margin	2.43		%	1.96		%
Gain on sale margin - retail		2.34			3.28			1.87			3.02
Gain on sale margin - partner		0.84			1.24			1.15			1.49

Pull through weighted gain on sale margin	Pull through weighted gain on sale margin	2.03			2.99			1.92			3.13			Pull through weighted gain on sale margin	2.26			2.13

IRLCs	IRLCs	$	12,032,026		$	43,673,515		$	61,620,241		$	131,502,157		IRLCs	$	8,468,435		$	29,991,452
IRLCs (units)	IRLCs (units)	38,569			134,756			188,444			397,201			IRLCs (units)	27,993			91,020

Pull through weighted lock volume	Pull through weighted lock volume	$	8,755,082		$	30,354,123		$	40,968,021		$	93,603,559		Pull through weighted lock volume	$	5,325,488		$	19,800,045

Servicing metrics	Servicing metrics													Servicing metrics
Total servicing portfolio (unpaid principal balance)	Total servicing portfolio (unpaid principal balance)	$	139,709,633		$	145,305,182		$	139,709,633		$	145,305,182		Total servicing portfolio (unpaid principal balance)	$	141,673,464		$	153,385,817
Total servicing portfolio (units)	Total servicing portfolio (units)	463,471			469,019			463,471			469,019			Total servicing portfolio (units)	475,765			496,868
60+ days delinquent ($)	60+ days delinquent ($)	$	1,365,774		$	1,679,691		$	1,365,774		$	1,679,691		60+ days delinquent ($)	$	1,282,432		$	1,444,779
60+ days delinquent (%)	60+ days delinquent (%)	0.98		%	1.16		%	0.98		%	1.16		%	60+ days delinquent (%)	0.91		%	0.94		%
Servicing rights at fair value, net(2)		$	2,013,269		$	1,836,694		$	2,013,269		$	1,836,694
Weighted average servicing fee (3)		0.29		%	0.30		%	0.29		%	0.30		%
Multiple(3) (4)		5.2			4.5			5.2			4.5
Servicing rights at fair value, net(1)														Servicing rights at fair value, net(1)	$	2,016,568		$	2,078,187
Weighted average servicing fee (2)														Weighted average servicing fee (2)	0.30		%	0.29		%
Multiple(2) (3)														Multiple(2) (3)	5.1			4.9

(1)~~Refer to the section titled “Non-GAAP Financial Measures” for a discussion and reconciliation of our Non-GAAP financial measures.~~

~~(2)~~Amount represents the fair value of servicing rights, net of servicing liabilities, which are included in accounts payable, accrued expenses, and other liabilities in the consolidated balance sheets.

~~(3)~~(2)Agency only.

~~(4)~~(3)Amounts represent the fair value of servicing rights, net, divided by the weighted average annualized servicing fee.

Results of Operations

The following table sets forth our consolidated financial statement data for the three months ended ~~September 30, 2022~~March 31, 2023 compared to the three months ended ~~September 30, 2021~~March 31, 2022.

3932

Three Months Ended
September 30, Change
$ Change
%
(Dollars in thousands) 2022 2021
(Unaudited)
REVENUES:
Net interest income $ 9,794 $ 14,235 $ (4,441) (31.2) %
Gain on origination and sale of loans, net 156,300 821,275 (664,975) (81.0)
Origination income, net 21,268 86,601 (65,333) (75.4)
Servicing fee income 113,544 102,429 11,115 10.9
Change in fair value of servicing rights, net (38,479) (138,462) 99,983 72.2
Other income 11,765 37,678 (25,913) (68.8)
Total net revenues 274,192 923,756 (649,564) (70.3)
EXPENSES:
Personnel expense 218,819 449,152 (230,333) (51.3)
Marketing and advertising expense 42,940 131,971 (89,031) (67.5)
Direct origination expense 19,463 49,559 (30,096) (60.7)
General and administrative expense 83,412 50,013 33,399 66.8
Occupancy expense 9,889 9,686 203 2.1
Depreciation and amortization 10,243 8,688 1,555 17.9
Servicing expense 14,221 22,879 (8,658) (37.8)
Other interest expense 36,138 22,823 13,315 58.3
Goodwill impairment — — — NM
Total expenses 435,125 744,771 (309,646) (41.6)
(Loss) income before income taxes (160,933) 178,985 (339,918) (189.9)
Income tax (benefit) expense (23,451) 24,708 (48,159) (194.9)
Net (loss) income (137,482) 154,277 (291,759) (189.1)
Net (loss) income attributable to noncontrolling interests (77,401) 102,802 (180,203) (175.3)
Net (loss) income attributable to loanDepot, Inc. $ (60,081) $ 51,475 $ (111,556) (216.7)


	Three Months Ended March 31,				Change $	Change %
(Dollars in thousands)	2023		2022
	(Unaudited)



REVENUES:


Net interest income	$	1,198	$	13,076			$	(11,878)	(90.8)	%
Gain on origination and sale of loans, net	108,152		363,131				(254,979)		(70.2)
Origination income, net	12,016		59,073				(47,057)		(79.7)
Servicing fee income	118,961		111,059				7,902		7.1
Change in fair value of servicing rights, net	(52,806)		(68,383)				15,577		22.8
Other income	20,380		25,355				(4,975)		(19.6)
Total net revenues	207,901		503,311				(295,410)		(58.7)


EXPENSES:
Personnel expense	141,027		345,993				(204,966)		(59.2)
Marketing and advertising expense	35,914		101,513				(65,599)		(64.6)
Direct origination expense	17,378		53,157				(35,779)		(67.3)
General and administrative expense	56,134		49,748				6,386		12.8
Occupancy expense	6,081		9,396				(3,315)		(35.3)
Depreciation and amortization	10,026		10,545				(519)		(4.9)
Servicing expense	4,834		21,511				(16,677)		(77.5)
Other interest expense	43,090		14,393				28,697		199.4

Total expenses	314,484		606,256				(291,772)		(48.1)

Loss before income taxes	(106,583)		(102,945)				(3,638)		(3.5)

Income tax benefit	(14,862)		(11,627)				(3,235)		(27.8)

Net loss	(91,721)		(91,318)				(403)		(0.4)

Net loss attributable to noncontrolling interests	(48,814)		(56,577)				7,763		13.7

Net loss attributable to loanDepot, Inc.	$	(42,907)	$	(34,741)			$	(8,166)	23.5

The results for the three months ended ~~September 30,~~March 31, 2023 reflect lower volume. The Federal Reserve raised the target federal funds rate seven times in 2022 ~~reflect~~and two times during the first quarter of 2023 which drove an increase in mortgage ~~rates which resulted in a~~interest rates. The $295.4 million decrease in ~~our profit margins. The decrease of $291.8 million, or 189.1% in~~total net ~~income reflect~~revenues reflects a ~~$665.0~~$255.0 million decrease in gain on origination and sale of loans, net ~~partially offset by a $309.6~~and $47.1 million decrease in ~~total expenses. The increased interest rate environment resulted in~~origination income, net from lower transaction volumes. Total expenses decreased $291.8 million as a ~~decrease in margins~~result of lower loan origination volumes, cost reduction efforts directed towards personnel, and ~~volume of mortgage loan originations and IRLCs from the comparable 2021 period.~~lower marketing expense.

Revenues

Net Interest Income. Net interest income represents income earned on LHFS offset by interest expense on amounts borrowed under warehouse and other lines of credit to finance such loans until sold. A ~~$5.5~~$4.7 billion decrease in the average balance of LHFS coupled with higher costing warehouse lines drove the decrease in net interest income.

Gain on Origination and Sale of Loans, Net. Gain on origination and sale of loans, net, was comprised of the following components:

4033


		Three Months Ended September 30,				Change $				Change %				Three Months Ended March 31,				Change $		Change %
(Dollars in thousands)	(Dollars in thousands)	2022		2021				(Dollars in thousands)			2023				2022
(Discount) premium from loan sales		$	(83,312)	$	674,782			$	(758,094)			(112.3)	%
Discount from loan sales											Discount from loan sales			$	(26,669)	$	(236,096)	$	209,427	88.7	%
Servicing rights additions	Servicing rights additions	124,244		345,882		(221,638)				(64.1)	Servicing rights additions			59,295		269,760		(210,465)		(78.0)
Fair value losses on IRLC and LHFS		(203,519)		(107,689)		(95,830)				(89.0)
Fair value gains (losses) from Hedging Instruments		274,185		(39,659)		313,844				791.4
Fair value gains (losses) on IRLC and LHFS											Fair value gains (losses) on IRLC and LHFS			73,884		(393,759)		467,643		118.8
Fair value (losses) gains from Hedging Instruments											Fair value (losses) gains from Hedging Instruments			(46,130)		676,405		(722,535)		(106.8)

Discount points, rebates and lender paid costs	Discount points, rebates and lender paid costs	57,634		(49,585)		107,219				216.2	Discount points, rebates and lender paid costs			57,446		60,067		(2,621)		(4.4)

Provision for loan loss obligation for loans sold	Provision for loan loss obligation for loans sold	(12,932)		(2,456)		(10,476)				(426.5)	Provision for loan loss obligation for loans sold			(9,674)		(13,246)		3,572		27.0
Total gain on origination and sale of loans, net	Total gain on origination and sale of loans, net	$	156,300	$	821,275	$	(664,975)			(81.0)	Total gain on origination and sale of loans, net			$	108,152	$	363,131	$	(254,979)	(70.2)

The decrease in gain on origination and sale of loans, net was primarily driven by a reduction in volume ~~and margins~~ due to higher interest rates ~~partially offset by~~and a decrease in fair value gains from Hedging ~~Instruments.~~Instruments, partially offset by a decrease in fair value losses on IRLCs.

Origination Income, Net. Origination income, net, reflects the fees that we earn, net of lender credits we pay, from originating loans. Origination income includes loan origination fees, processing fees, underwriting fees, and other fees collected from the borrower at the time of funding. Lender credits typically include rebates or concessions to borrowers for certain loan origination costs. The ~~$65.3~~$47.1 million or ~~75.4%~~79.7% decrease in origination income was the result of a ~~69.2%~~77.1% decrease in loan origination volumes.

Servicing Fee Income. Servicing fee income reflects contractual servicing fees and ancillary and other fees (including late charges) related to the servicing of mortgage loans. The increase of ~~$11.1~~$7.9 million or ~~10.9%~~7.1% in servicing income reflects an increase of~~$4.3 billion~~ in the weighted average ~~UPB of~~servicing fee, our transition to in-house servicing, ~~portfolio.~~and higher ancillary income from the increase in interest rates.

Change in Fair Value of Servicing Rights, Net. Change in fair value of servicing rights, net includes (i) fair value gains or losses net of Hedging Instrument gains or losses; (ii) collection/realization of cash flows, which includes principal amortization and prepayments; and (iii) realized gains or losses on the sales of servicing rights. The increase of ~~$100.0~~$15.6 million reflects ~~fair value gains of $49.5 million and~~ lower prepayments of ~~$49.7~~$42.5 million due to the increasing rate ~~environment.~~environment, partially offset by an increase in fair value losses, net of hedge of $17.0 million.

Other Income. Other income includes our pro rata share of net earnings from joint ventures, fee income from title, escrow and settlement services for mortgage loan transactions performed by LDSS, ~~and~~the fair value changes in our trading ~~securities.~~securities, and interest on cash deposits. The decrease of ~~$25.9~~$5.0 million or ~~68.8%~~19.6% was primarily the result of a decrease of ~~$26.5~~$25.5 million in escrow and title fee income due to decreased mortgage loan settlement activity, ~~and~~partially offset by a decrease in fair value losses ~~of $6.1 million~~ on ~~our~~ trading securities ~~due to the~~of $10.1 million, and an $8.4 million increase in income on cash deposits from increasing ~~rate environment.~~interest rates.

~~Expenses~~

Personnel Expense. Personnel expense includes salaries, commissions, incentive compensation, benefits, and other employee ~~compensation costs~~costs.. The ~~$230.3~~$205.0 million or ~~51.3%~~59.2% decrease ~~reflects lower~~in personnel expense included volume-related declines in commissions of ~~$155.8~~$98.3 million. The remaining decrease of $106.6 million ~~due~~was attributable to lower ~~loan origination volumes and lower~~ salaries ~~and~~& benefits ~~of $80.7 million, partially offset by higher severance of $8.0 million~~from the 51.9% decrease in headcount related to previously announced cost savings initiatives. As of ~~September 30, 2022,~~March 31, 2023, we had ~~6,121~~4,834 employees compared to ~~11,664~~10,054 employees as of ~~September 30, 2021, representing a decrease of 47.5%.~~March 31, 2022.

Marketing and Advertising Expense. ~~Marketing and advertising expenses relate to performance and brand marketing.~~ The ~~$89.0~~$65.6 million or ~~67.5%~~64.6% decrease in marketing expense ~~was driven by~~reflects lower lead aggregators from a decline in the total addressable market and cost savings measures affecting ~~purchased leads,~~national television campaigns.

Direct Origination Expense. Direct origination expense reflects the unreimbursed portion of direct out-of-pocket expenses that we incur in the loan origination process, including underwriting, appraisal, credit report, loan document and ~~print ads.~~other expenses paid to non-affiliates.The $35.8 million or 67.3% decrease in direct origination expense was the result of decreased loan originations during the period.

General and Administrative Expense. General and administrative ~~expenses include~~expense includes professional fees, data processing expense, communications expense, and other operating expenses. The ~~$33.4~~$6.4 million or ~~66.8%~~12.8% increase in general and administrative expense ~~was driven by charges that~~ included ~~an $11.0 million loss on disposal of fixed assets, $9.1~~$2.6 million of ~~lease impairment~~software and subscription charges and ~~a $4.5~~$2.6 million ~~increase~~ in professional and consulting services.

Servicing Expense. S~~ervicing expense reflects in-house~~In early 2023, we completed the transition of our servicing ~~costs and amounts that we pay~~portfolio to our ~~sub-servicers to service our mortgage loan servicing portfolio.~~in-house platform. The ~~$8.7~~decrease of $16.7 million or ~~37.8% decrease~~77.5% in servicing expense reflects our shift to in-house servicing.

Other Interest Expense. The ~~$13.3~~$28.7 million or ~~58.3%~~199.4% increase in other interest expense was the result of a ~~$785.3~~$395.9 million increase in average ~~outstanding debt obligations primarily resulting from a $907.3 million increase in MSR facilities.~~

~~Income Tax Expense (Benefit).~~ Benefit for income taxes of $23.5 million for the three months ended September 30, 2022, compared to expense of $24.7 million for the three months ended September 30, 2021 reflects net losses for the three months ended September 30, 2022 compared to net income for the three months ended September 30, 2021.

~~Nine Months Ended September 30, 2022 Compared to Nine Months Ended September 30, 2021~~

Nine Months Ended
September 30, Change
$ Change
%
(Dollars in thousands) 2022 2021
(Unaudited)
REVENUES:
Net interest income $ 45,668 $ 22,495 $ 23,173 103.0 %
Gain on origination and sale of loans, net 665,993 2,647,328 (1,981,335) (74.8)
Origination income, net 119,449 280,824 (161,375) (57.5)
Servicing fee income 341,929 279,738 62,191 22.2
Change in fair value of servicing rights, net (140,370) (327,194) 186,824 57.1
Other income 53,472 116,487 (63,015) (54.1)
Total net revenues 1,086,141 3,019,678 (1,933,537) (64.0)
EXPENSES:
Personnel expense 861,382 1,523,012 (661,630) (43.4)
Marketing and advertising expense 205,289 355,730 (150,441) (42.3)
Direct origination expense 106,616 146,553 (39,937) (27.3)
General and administrative expense 197,089 149,984 47,105 31.4
Occupancy expense 28,673 28,956 (283) (1.0)
Depreciation and amortization 32,110 25,827 6,283 24.3
Servicing expense 46,472 76,731 (30,259) (39.4)
Other interest expense 83,671 57,261 26,410 46.1
Goodwill impairment 40,736 — 40,736 100.0
Total expenses 1,602,038 2,364,054 (762,016) (32.2)
(Loss) income before income taxes (515,897) 655,624 (1,171,521) (178.7)
Income tax (benefit) expense (63,274) 47,210 (110,484) (234.0)
Net (loss) income (452,623) 608,414 (1,061,037) (174.4)
Net (loss) income attributable to noncontrolling interests (256,873) 503,503 (760,376) (151.0)
Net (loss) income attributable to loanDepot, Inc. $ (195,750) $ 104,911 $ (300,661) (286.6)

Results for the nine months ended September 30, 2022 reflect the sharp increase in mortgage rates which resulted in a decrease to our profit margins. The decrease of $1.1 billion, or 174.4% in net income is primarily from a $2.0 billion decrease in gain on origination and sale of loans, net, partially offset by a $762.0 million decrease in total expenses. The increased interest rate environment resulted in a decrease in margins and volume of mortgage loan originations and IRLCs from the comparable 2021 period.

~~Revenues~~

~~Net Interest Income.~~ ~~The increase in net interest income reflected higher yields on LHFS, partially offset by a $3.3 billion decrease in average LHFS.~~

~~Gain on Origination and Sale of Loans, Net. Gain on origination and sale of loans, net was comprised of the following components:~~

Nine Months Ended
September 30, Change
$ Change
%
(Dollars in thousands) 2022 2021
(Discount) premium from loan sales $ (756,602) $ 1,552,668 $ (2,309,270) (148.7) %
Servicing rights additions 574,459 1,302,884 (728,425) (55.9)
Fair value losses on IRLC and LHFS (501,053) (454,845) (46,208) (10.2)
Fair value gains from Hedging Instruments 1,268,271 442,387 825,884 186.7
Discount points, rebates and lender paid costs 189,468 (193,043) 382,511 198.1
Provision for loan loss obligation for loans sold (108,550) (2,723) (105,827) (3,886.4)
$ 665,993 $ 2,647,328 $ (1,981,335) (74.8)

The decrease in gain on origination and sale of loans, net reflects increased market rates during the nine months ended September 30, 2022 and the resulting decrease in loan origination volumes and gain on sale margins, partially offset by fair value gains from Hedging Instruments and lower lender paid costs. The increased provision for loan loss obligations on loan sold also reflects the higher market rates which reduced the fair value of loans subject to repurchase that were originated in prior periods at lower interest rates.

~~Origination Income, Net. The decrease in origination income, net, of $161.4 million or 57.5% is consistent with the decrease in loan origination volumes.~~

~~Servicing Fee Income. The $62.2 million or 22.2% increase was the result of an increase of$23.3 billion in the average UPB of our servicing portfolio.~~

~~Change in Fair Value of Servicing Rights, Net. The increase of $186.8 million reflects a $130.1 million decrease in prepayments from the increasing rate environment and $54.5 million in fair value gains.~~

~~Other Income.~~ The decrease of $63.0 million or 54.1% reflects a decrease of $53.6 million in escrow and title fee income due to decreased mortgage loan settlement services and fair value losses on trading securities of $19.1 million from rising interest rates.

~~Expenses~~

~~Personnel Expense.~~ The decrease of $661.6 million reflects a $434.2 million decrease in commissions due to the decrease in loan originations and a $177.3 million decrease in salaries and benefits due to the 47.5% decrease in headcount.

~~Marketing and Advertising Expense.~~ ~~The decrease of $150.4 million or 42.3% reflects a reduction in television ads and purchased leads.~~

~~General and Administrative Expense~~. The $47.1 million or 31.4% increase in general and administrative expense included $15.1 million of lease impairment charges, an $11.0 million loss on disposal of fixed assets, and a $6.8 million increase in professional and consulting services.

~~Servicing Expense.~~ ~~The decrease of $30.3 million or 39.4% between periods reflects our shift to in-house servicing.~~

~~Other Interest Expense.~~ ~~The $26.4 million or 46.1% increase in other interest expense was the result of a $955.8 million increase in average~~ balances, ~~and~~ higher rates on secured credit facilities, ~~partially offset by~~and a $10.5 million gain on extinguishment of debt from the repurchase of $97.5 million of the 2028 Senior Notes during the first quarter of 2022.

~~Income Tax Expense (Benefit).~~ The benefit for income taxes of $63.3 million for the nine months ended September 30, 2022, as compared to expense of $47.2 million for the nine months ended September 30, 2021 reflects net losses, partially offset by non-deductible impairment of goodwill and other intangible assets for the nine months ended September 30, 2022 compared to net income for the nine months ended September 30, 2021.

Balance Sheet Highlights

~~September 30, 2022~~March 31, 2023 Compared to December 31, ~~2021~~2022

The following table sets forth our consolidated balance sheets as of the dates indicated:
(Dollars in thousands) September 30,
2022 December 31,
2021 Change
$ Change
%
(Unaudited)
ASSETS
Cash and cash equivalents $ 1,143,948 $ 419,571 $ 724,377 172.6 %
Restricted cash 160,926 201,025 (40,099) (19.9)
Accounts receivable, net 108,253 56,183 52,070 92.7
Loans held for sale, at fair value 2,692,820 8,136,817 (5,443,997) (66.9)
Derivative assets, at fair value 316,647 194,665 121,982 62.7
Servicing rights, at fair value 2,030,026 2,006,712 23,314 1.2
Trading securities, at fair value 97,210 72,874 24,336 33.4
Property and equipment, net 98,944 104,262 (5,318) (5.1)
Operating lease right-of-use assets 39,480 55,646 (16,166) (29.1)
Prepaid expenses and other assets 115,452 140,315 (24,863) (17.7)
Loans eligible for repurchase 554,892 363,373 191,519 52.7
Investments in joint ventures 19,938 18,553 1,385 7.5
Goodwill and intangible assets, net — 42,317 (42,317) (100.0)
Total assets $ 7,378,536 $ 11,812,313 $ (4,433,777) (37.5)
LIABILITIES & EQUITY
Warehouse and other lines of credit $ 2,529,436 $ 7,457,199 $ (4,927,763) (66.1)
Accounts payable, accrued expenses and other liabilities 716,048 624,444 91,604 14.7
Derivative liabilities, at fair value 149,837 37,797 112,040 296.4
Liability for loans eligible for repurchase 554,892 363,373 191,519 52.7
Operating lease liability 66,122 71,932 (5,810) (8.1)
Debt obligations, net 2,283,704 1,628,208 655,496 40.3
Total liabilities 6,300,039 10,182,953 (3,882,914) (38.1)
Total equity 1,078,497 1,629,360 (550,863) (33.8)
Total liabilities and equity $ 7,378,536 $ 11,812,313 $ (4,433,777) (37.5)

~~Cash and Cash Equivalents.~~ ~~The~~$724.4 million or 172.6% increase in cash and cash equivalents included $689.9 million in proceeds from the bulk sale of MSRs and increased utilization of MSR facilities, partially offset by the repurchase of $97.5 million of 2028 Senior Notes and $118.9 million of dividends and distributions.


(Dollars in thousands)	March 31, 2023		December 31, 2022		Change $		Change %
	(Unaudited)
ASSETS
Cash and cash equivalents	$	798,119	$	863,956	(65,837)		(7.6)	%
Restricted cash	90,084		116,545		(26,461)		(22.7)
Accounts receivable, net	99,381		145,279		(45,898)		(31.6)
Loans held for sale, at fair value	2,039,367		2,373,427		(334,060)		(14.1)
Derivative assets, at fair value	84,624		39,411		45,213		114.7
Servicing rights, at fair value	2,028,788		2,037,447		(8,659)		(0.4)
Trading securities, at fair value	95,561		94,243		1,318		1.4
Property and equipment, net	88,877		92,889		(4,012)		(4.3)
Operating lease right-of-use assets	35,362		35,668		(306)		(0.9)
Prepaid expenses and other assets	139,904		155,982		(16,078)		(10.3)
Loans eligible for repurchase	672,458		634,677		37,781		6.0
Investments in joint ventures	18,266		20,410		(2,144)		(10.5)



Total assets	$	6,190,791	$	6,609,934	$	(419,143)	(6.3)

LIABILITIES & EQUITY
Warehouse and other lines of credit	$	1,830,319	$	2,146,602	$	(316,283)	(14.7)
Accounts payable, accrued expenses and other liabilities	449,641		488,696		(39,055)		(8.0)
Derivative liabilities, at fair value	35,662		67,492		(31,830)		(47.2)
Liability for loans eligible for repurchase	672,458		634,677		37,781		6.0
Operating lease liability	57,837		61,675		(3,838)		(6.2)
Debt obligations, net	2,303,712		2,289,319		14,393		0.6
Total liabilities	5,349,629		5,688,461		(338,832)		(6.0)
Total equity	841,162		921,473		(80,311)		(8.7)
Total liabilities and equity	$	6,190,791	$	6,609,934	$	(419,143)	(6.3)

Loans Held for Sale, at Fair Value.Loans held for sale, at fair value, are primarily fixed and variable rate, 15- to 30-year term first-lien loans that are secured by residential property. The ~~$5.4 billion~~$334.1 million or ~~66.9%~~14.1% decrease reflects ~~$52.5~~$5.4 billion in loan sales, partially offset by ~~$47.4~~$4.9 billion in loan ~~originations.~~

~~Derivative Assets, at Fair Value.~~ ~~The $122.0 million or 62.7% increase reflects a $285.5 million~~originations, an increase in Hedging Instruments from increasing interest rates, partially offset by a $163.5 million decrease in IRLCs assets from lower IRLC volume. At September 30, 2022, derivative assets included Hedging Instruments withthe fair ~~values totaling $295.7 million compared to $10.3 million at December 31, 2021.~~value, and loan repurchase activity.

4635

~~Servicing Rights,~~Derivative Assets, at Fair Value. The ~~$23.3~~$45.2 million or ~~1.2%~~114.7% increase ~~included $574.5 million in capitalized servicing rights from the sale of loans on~~reflects a ~~servicing-retained basis and a $373.2~~$31.6 million increase in ~~estimated fair value due to~~IRLCs from higher volume and a ~~decrease~~$13.6 million increase in ~~prepayment speed assumptions from increased interest rates, partially offset by a $740.7 milliondecrease in servicing rights from the sale of $43.2 billion in UPB of servicing rights and $193.0 million of principal amortization and prepayments.~~

~~Trading Securities, at Fair Value.~~ The $24.3 million or 33.4% increase represents the Mello Mortgage Capital Acceptance securitizations completed in 2022, partially offset by principal collections and fair value losses. We retained a five percent economic interest in the credit risk of the assets collateralizing the securitization pursuant to the U.S. credit risk retention rules.

~~Goodwill and intangible assets, net.~~ The impact of rising interest rates on the mortgage industry and the Company’s recent stock performance triggered an interim evaluation of goodwill and other intangible assets. Based upon the results of these evaluations, a non-cash impairment charge of $42.1 million was recognized during the second quarter of 2022 to write off the balance of goodwill and other intangible assets. The impairment charge was driven predominantly by stock market valuations and the price of our common stock, which adversely impacted the valuation of our goodwill and other intangible assets.Hedging Instruments.

Warehouse and Other Lines of Credit. The decrease of $~~4.9 billion~~316.3 million or ~~66.1%~~14.7% was the result of loan sales outpacing originations by ~~$5.1 billion~~$452.2 million during the ~~nine~~three months ended ~~September 30, 2022.~~March 31, 2023.

Derivative Liabilities, at Fair Value. The ~~increase~~decrease of ~~$112.0~~$31.8 million or ~~296.4%~~47.2% reflects ~~an $81.9~~a $28.3 million ~~increase in IRLCs and a $30.2 million increase~~decrease in Hedging Instrument liabilities ~~due to increasing interest rates.~~

~~Debt Obligations, net.~~ ~~The increase of $655.5 million or 40.3% included an increase in secured credit facilities of $748.8 million, partially offset by the repurchase of $97.5 million of our 2028 Senior Notes.~~

~~Equity. Total equity was $1.1 billion~~ and ~~$1.6 billion as of September 30, 2022 and December 31, 2021, respectively. The decrease was attributed to net loss of $452.6 million, dividends and distributions totaling $89.8~~a $3.5 million decrease ~~to additional paid~~ in capital of $19.8 million related to deferred taxes, and the repurchase of treasury shares, at cost of $0.4 million to net settle and withhold tax on vested RSUs, partially offset by stock-based compensation of $11.8 million.IRLCs.

Liquidity and Capital Resources

Liquidity

Our liquidity reflects our ability to meet our current obligations, ~~(including~~including our operating expenses and, when applicable, the retirement of our debt and margin calls relating to our Hedging Instruments, warehouse and other lines of credit, ~~and~~ secured credit facilities, fund new originations and purchases, meet servicing advance requirements, and make investments as we identify them. We forecast the need to have adequate liquid funds available to operate and grow our business. As of ~~September 30, 2022,~~March 31, 2023, unrestricted cash and cash equivalents were ~~$1.1 billion~~$798.1 million and committed and uncommitted available capacity under our warehouse and other lines of credit was ~~$3.1~~$2.1 billion.

We fund substantially all of the mortgage loans we close through borrowings under our warehouse and other lines of credit. Our mortgage origination liquidity could be affected as our lenders reassess their exposure to the mortgage origination industry and either curtail access to uncommitted mortgage warehouse financing capacity or impose higher costs to access such capacity. Our liquidity may be further constrained as there may be less demand by investors to acquire our mortgage loans in the secondary market.

As a servicer, we are required to advance principal and interest to the investor for up to four months on GSE backed mortgages and longer on other government agency backed mortgages on behalf of clients who have entered a forbearance plan. As of ~~September 30, 2022,~~March 31, 2023, approximately ~~0.2%~~0.1%, or ~~$319.5~~$174.0 million UPB, of our servicing portfolio was in active forbearance. While these advance requirements have decreased from the higher levels during 2020, the economic impact of COVID-19 could continue to result in additional advance requirements related to forbearance plans.

Sources and Uses of Cash

Our primary sources of liquidity have been as follows: (i) funds obtained from our warehouse and other lines of credit; (ii) proceeds from debt obligations; (iii) proceeds received from the sale and securitization of loans; (iv) proceeds from the sale of servicing rights; (v) loan fees from the origination of loans; (vi) servicing fees; (vii) title and escrow fees from settlement services; (viii) real estate referral fees; and (ix) interest income from LHFS.

Our primary uses of funds for liquidity have included the following: (i) funding mortgage loans; (ii) funding loan origination costs; (iii) payment of warehouse line haircuts required at loan origination; (iv) payment of interest expense on warehouse and other lines of credit; (v) payment of interest expense under debt obligations; (vi) payment of operating expenses; (vii) repayment of warehouse and other lines of credit; (viii) repayment of debt obligations; (ix) funding of servicing advances; (x) margin calls on warehouse and other lines of credit or Hedging Instruments; (xi) ~~payment of tax distributions to holders of Holdco Units; (xii) payments of cash dividends or distributions subject to the discretion of our board of directors, (xiii)~~ repurchases of loans under representation and warranty breaches; and ~~(xiv)~~(xii) costs relating to ~~servicing and subservicing.~~servicing.

We rely on the secondary mortgage market as a source of long-term capital to support our mortgage lending operations. Approximately ~~78%~~73% of the mortgage loans that we originated during the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 were sold in the secondary mortgage market to Fannie Mae or Freddie Mac or, in the case of MBS guaranteed by Ginnie Mae, are mortgage loans insured or guaranteed by the FHA or VA. We also sell loans to many private investors.

At this time, we currently believe that our cash on hand, as well as the sources of liquidity described above, will be sufficient to maintain our current operations and fund our loan operations and capital commitments for the next twelve months. However, we will continue to review our liquidity needs in light of current and anticipated mortgage market conditions and we have taken various steps to align our cost structure with current and expected mortgage origination volumes.

Warehouse ~~and Other~~ Lines ~~of Credit~~ and Debt Obligations

Warehouse ~~and other~~ lines ~~of credit~~ are discussed in Note 9-8- Warehouse and Other Lines of Credit and debt obligations are discussed in Note ~~10-~~9- Debt Obligations of the Notes to Consolidated Financial Statements contained in ~~Item~~“Part 1. Financial information”

Our lenders require us to comply with various financial covenants including tangible net worth, liquidity, leverage ratios and profitability. As a result of net losses during 2022 and in the first quarter of 2023, we were required to amend certain of our warehouse lines or debt obligations or obtain waivers of profitability related to financial covenants in certain of our debt obligations. We expect that we will need to further amend or obtain waivers in order to maintain compliance with such financial covenants. Our lenders are not required to grant any such amendments or waivers and may determine not to do so. As of ~~September 30, 2022,~~March 31, 2023, following certain amendments, we were in full compliance with all financial covenants. Although these financial covenants limit the amount of indebtedness that we may incur and affect our liquidity through minimum cash reserve requirements, we believe that these covenants currently provide us with sufficient flexibility to operate our business and obtain the financing necessary to achieve that purpose.

We finance most of our loan originations on a short-term basis using our warehouse and other lines of credit. Under these facilities, we agree to transfer certain loans to our counterparties against the transfer of funds by them, with a simultaneous agreement by the counterparties to transfer the loans back to us at the date loans are sold, or on demand by us, against the transfer of funds from us. We do not recognize these transfers as sales for accounting purposes. During the ~~nine~~three months ended ~~September 30, 2022,~~March 31, 2023, our loans remained on warehouse lines for an average of 1819 days. Our warehouse facilities are generally short-term borrowings with original maturities between one and two years. Our securitization facilities are generally two or three year terms. We utilize both committed and uncommitted loan funding facilities and we evaluate our needs under these facilities based on forecasted volume of loan originations and sales.

As of ~~September 30, 2022,~~March 31, 2023, we maintained revolving lines of credit with ~~ten~~nine counterparties providing warehouse and securitization facilities with borrowing capacity totaling ~~$5.7~~$4.1 billion of which $1.4 billion was committed. Our ~~$5.7~~$4.1 billion of capacity as of ~~September 30, 2022~~March 31, 2023 was comprised of ~~$2.9~~$3.6 billion with maturities staggered throughout ~~2022, $2.3 billion maturing in~~ 2023 and $0.5 billion maturing in 2024. As of ~~September 30, 2022,~~March 31, 2023, we had ~~$2.5~~$1.8 billion of borrowings outstanding and ~~$3.1~~$2.1 billion of additional availability under our facilities.

When we draw on our warehouse and securitization facilities we must pledge eligible loan collateral. Our warehouse line providers require us to make a capital investment, or “haircut.” upon financing the loan, which is generally based on product

types and the market value of the loans. The haircuts are normally recovered from sales proceeds. As of ~~September 30, 2022,~~March 31, 2023, we had a total of ~~$38.5~~$7.8 million in restricted cash posted as collateral with our warehouse and securitization facilities, of which ~~$5.5~~$4.3 million was the minimum requirement.

In addition to our warehouse lines, we fund our balance sheet through our secured and unsecured debt obligations. The availability and cost of funds to us can vary depending on market conditions. From time to time, and subject to any applicable laws or regulations, we may take steps to reduce or repurchase our debt through redemptions, tender offers, cash purchases, prepayments, refinancing, exchange offers, open market or privately-negotiated transactions. The amount of debt, if any, that may be reduced or repurchased will depend on various factors, such as market conditions, trading levels of our debt, our cash positions, our compliance with debt covenants, and other considerations.

Secured debt obligations as of ~~September 30, 2022~~March 31, 2023 included secured credit facilities and Term Notes that totaled $1.3 billion net of ~~$1.9~~$0.7 million of deferred financing costs. Secured credit facilities are secured by Ginnie Mae, Fannie Mae, or Freddie Mac MSRs, certain servicing advance receivables, or trading securities. Term Notes are secured by certain participation certificates relating to Ginnie Mae MSRs.

Unsecured debt obligations as of ~~September 30, 2022~~March 31, 2023 consisted of Senior Notes totaling $1.0 billion net of ~~$11.3~~$9.9 million of deferred financing costs. During the first quarter of 2022, we repurchased $97.5 million of 2028 Senior Notes at an average purchase price of 87.9% of par which resulted in a $10.5 million gain on extinguishment of debt recorded in other interest expense on the consolidated ~~statement~~statements of operations.

Dividends and Distributions

~~During~~As part of our balance sheet and capital management strategies, we suspended our regular quarterly dividend effective March 31, 2022 and for the ~~nine months ended September 30, 2022, we paid dividends and distributions totaling $118.9 million.~~

On December 13, 2021, we declared a regular cash dividend of $0.08 per share on our Class A common stock and Class D common stock. The board of directors of LD Holdings authorized a simultaneous cash distribution on its units. The dividend was paid on January 18, 2022 to the Company's stockholders of record as of the close of business on January 3, 2022.

On March 14, 2022, we declared a regular cash dividend of $0.08 per share on our Class A common stock and Class D common stock. The board of directors of LD Holdings authorized a simultaneous cash distribution on its units. The dividend was paid on April 18, 2022 to the Company's stockholders of record as of the close of business on April 4, 2022.foreseeable future.

Cash dividends are subject to the discretion of our board of directors and our compliance with applicable law, and depend on, among other things, our results of operations, financial condition, level of indebtedness, capital requirements, contractual restrictions, including the satisfaction of our obligations under the TRA, restrictions in our debt agreements, business prospects and other factors that our board of directors may deem relevant.

Our ability to pay dividends depends on our receipt of cash dividends from our operating subsidiaries, which may further restrict our ability to pay dividends as a result of the laws of their jurisdiction of organization or agreements of our subsidiaries, including agreements governing our indebtedness. Future agreements may also limit our ability to pay dividends.

~~As part of our balance sheet and capital management strategies, we suspended our regular quarterly dividend effective March 31, 2022 and for the foreseeable future.~~

Contractual Obligations and Commitments

Our estimated contractual obligations as of ~~September 30, 2022~~March 31, 2023 are as follows:


		Payments Due by Period											Payments Due by Period
(Dollars in thousands)	(Dollars in thousands)	Total		Less than 1 Year		1-3 years		3-5 Years		More than 5 Years		(Dollars in thousands)	Total		Less than 1 Year		1-3 years		3-5 Years		More than 5 Years

Warehouse and other lines of credit	Warehouse and other lines of credit	$	2,529,436	$	2,029,436	$	500,000	$	—	$	—	Warehouse and other lines of credit	$	1,830,319	$	1,330,319	$	500,000	$	—	$	—
Debt obligations (1)	Debt obligations (1)											Debt obligations (1)
Secured credit facilities	Secured credit facilities	1,094,433		746,451		347,982		—		—		Secured credit facilities	1,111,812		763,830		347,982		—		—
Term Notes	Term Notes	200,000		—		200,000		—		—		Term Notes	200,000		200,000		—		—		—
Senior Notes	Senior Notes	1,002,475		—		—		500,000		502,475		Senior Notes	1,002,475		—		500,000		—		502,475

Operating lease obligations (2)	Operating lease obligations (2)	74,348		23,112		33,122		13,448		4,666		Operating lease obligations (2)	69,489		22,621		30,207		15,006		1,654
Naming and promotional rights agreements	Naming and promotional rights agreements	95,018		19,642		43,876		12,000		19,500		Naming and promotional rights agreements	87,069		20,630		37,939		12,000		16,500
Total contractual obligations	Total contractual obligations	$	4,995,710	$	2,818,641	$	1,124,980	$	525,448	$	526,641	Total contractual obligations	$	4,301,164	$	2,337,400	$	1,416,128	$	27,006	$	520,629

(1) Amounts exclude deferred financing costs.

(2) Represents lease obligations for office space under non-cancelable ~~operation~~operating lease agreements.

In addition to the above contractual obligations, we also have interest rate lock commitments and forward sale contracts. Commitments to originate loans do not necessarily reflect future cash requirements as some commitments are expected to expire without being drawn upon and, therefore, those commitments have been excluded from the table above. Refer to Note 6-5- Derivative Financial Instruments and Hedging Activities and Note 14- Commitments & Contingencies of the Notes to Consolidated Financial Statements contained in Item 1 for further discussion on ~~derivatives.~~derivatives and other contractual commitments.

Off-Balance Sheet Arrangements

As of ~~September 30, 2022,~~March 31, 2023, we were party to mortgage loan participation purchase and sale agreements, pursuant to which we have access to uncommitted facilities that provide liquidity for recently sold MBS up to the MBS settlement date. These facilities, which we refer to as gestation facilities, are a component of our financing strategy and are off-balance sheet ~~arrangements provided by certain warehouse lenders.~~arrangements.

Critical Accounting Policies and Estimates

We prepare our consolidated financial statements in accordance with GAAP, which requires us to make judgments, estimates and assumptions that affect: (i) the reported amounts of our assets and liabilities; (ii) the disclosure of our contingent assets and liabilities at the end of each reporting period; and (iii) the reported amounts of revenues and expenses during each reporting period. We continually evaluate these judgments, estimates and assumptions based on our own historical experience, knowledge and assessment of current business and other conditions and our expectations regarding the future based on available information which together form our basis for making judgments about matters that are not readily apparent from

other sources. Since the use of estimates is an integral component of the financial reporting process, our actual results could differ from those estimates. Some of our accounting policies require a higher degree of judgment than others in their application. Our accounting policies are described in Note 1 to the consolidated financial statements included in the Company's ~~2021~~2022 Form 10-K. At December 31, ~~2021,~~2022, the most critical of these significant accounting policies were policies related to the fair value of loans held for sale, servicing rights, and derivative financial instruments. As of the date of this report, there have been no significant changes to the Company's critical accounting policies or estimates.

When reading our consolidated financial statements, you should consider our selection of critical accounting policies, the judgment and other uncertainties affecting the application of such policies and the sensitivity of reported results to changes in conditions and assumptions.

~~Reconciliation of~~ Non-GAAP Measures

To provide investors with information in addition to our results as determined by GAAP, we disclose certain non-GAAP measures to assist investors in evaluating our financial results. We believe these non-GAAP measures provide useful information to investors regarding our results of operations because each measure assists both investors and management in analyzing and benchmarking the performance and value of our business. They facilitate company-to-company operating performance comparisons by backing out potential differences caused by variations in hedging strategies, changes in valuations, capital structures (affecting interest expense on non-funding debt), taxation, the age and book depreciation of facilities (affecting relative depreciation expense), ~~the amortization of intangibles,~~ and other cost or benefit items which may vary for different companies for reasons unrelated to operating performance. These non-GAAP measures include our Adjusted Total Revenue, Adjusted Net Income (Loss), Adjusted Diluted Earnings (Loss) Per Share, and Adjusted EBITDA (LBITDA). We exclude from each of these non-GAAP financial measures the change in fair value of MSRs and related hedging gains and losses as they add volatility and are not indicative of the Company’s operating performance or results of operation. We also exclude ~~stock~~stock-based compensation expense, which is a non-cash expense, ~~management fees, IPO expenses,~~ gains or losses on extinguishment of debt and disposal of fixed assets, non-cash goodwill impairment, and other impairment charges to intangible assets and operating lease right-of-use assets as management does not consider these costs to be indicative of our performance or results of operations. Adjusted EBITDA (LBITDA) includes interest expense on funding facilities, which are recorded as a component of “net interest income (expense)”, as these expenses are a direct operating expense driven by loan origination volume. By contrast, interest expense on our non-funding debt is a function of our capital structure and is therefore excluded from Adjusted EBITDA (LBITDA). Adjustments for income taxes are made to reflect historical results of operations on the basis that it was taxed as a corporation under the Internal Revenue Code, and therefore subject to U.S. federal, state and local income taxes. These non-GAAP measures have limitations as analytical tools, and should not be considered in isolation or as a substitute for revenue, net income, or any other operating performance measure calculated in accordance with GAAP, and may not be comparable to a similarly titled measure reported by other companies. Some of these limitations are:

•they do not reflect every cash expenditure, future requirements for capital expenditures or contractual commitments;

•Adjusted EBITDA (LBITDA) does not reflect the significant interest expense or the cash requirements necessary to service interest or principal payment on our debt;

•although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced or require improvements in the future, and Adjusted Total Revenue, Adjusted Net Income (Loss), and Adjusted EBITDA (LBITDA) do not reflect any cash requirement for such replacements or improvements; and

•they are not adjusted for all non-cash income or expense items that are reflected in our statements of cash flows.

Because of these limitations, Adjusted Total Revenue, Adjusted Net Income (Loss), Adjusted Diluted Earnings (Loss) Per Share, and Adjusted EBITDA (LBITDA) are not intended as alternatives to total revenue, net income (loss), net income (loss) attributable to the Company, or Diluted Earnings (Loss) Per Share or as an indicator of our operating performance and should not be considered as measures of discretionary cash available to us to invest in the growth of our business or as measures of cash that will be available to us to meet our obligations. We compensate for these limitations by using Adjusted Total Revenue, Adjusted Net Income (Loss), Adjusted Diluted Earnings (Loss) Per Share, and Adjusted EBITDA (LBITDA) along with other comparative tools, together with U.S. GAAP measurements, to assist in the evaluation of operating performance. See below for a reconciliation of these non-GAAP measures to their most comparable U.S. GAAP measures.

Reconciliation of Total Revenue to Adjusted Total Revenue
(Dollars in thousands)
(Unaudited):
Three Months Ended Nine Months Ended
September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021
Total net revenue $ 274,192 $ 923,756 $ 1,086,141 $ 3,019,678
Change in fair value of servicing rights net, of hedging gains and losses(1)
(24,529) 25,014 (58,601) (4,138)
Adjusted total revenue $ 249,663 $ 948,770 $ 1,027,540 $ 3,015,540


Reconciliation of Total Revenue to Adjusted Total Revenue (Dollars in thousands) (Unaudited):	Three Months Ended
	March 31, 2023		March 31, 2022
Total net revenue	$	207,901	$	503,311
Change in fair value of servicing rights net, of hedging gains and losses(1)	18,289		1,295
Adjusted total revenue	$	226,190	$	504,606

(1)Represents the change in the fair value of servicing rights attributable to changes in assumptions, net of hedging gains and losses.

Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss)
(Dollars in thousands)
(Unaudited):
Three Months Ended Nine Months Ended
September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021
Net (loss) income attributable to loanDepot, Inc. $ (60,081) $ 51,475 $ (195,750) $ 104,911
Net (loss) income from the pro forma conversion of Class C common shares to Class A common shares(1)
(77,401) 102,802 (256,873) 503,503
Net (loss) income (137,482) 154,277 (452,623) 608,414
Adjustments to the benefit (provision) for income taxes(2)
20,124 (27,171) 66,787 (133,076)
Tax-effected net (loss) income (117,358) 127,106 (385,836) 475,338
Change in fair value of servicing rights, net of hedging gains and losses(3)
(24,529) 25,014 (58,601) (4,138)
Change in fair value - contingent consideration — (77) — (77)
Stock-based compensation expense and management fees 4,773 2,882 11,794 65,084
IPO expenses — (54) — 6,041
Gain on extinguishment of debt — — (10,528) (10,528) —
Loss on disposal of fixed assets 11,026 — 11,026 —
Goodwill impairment — — 40,736 —
Other impairment 9,149 — 15,112 —
Tax effect of adjustments(4)
93 (7,338) 9,196 (17,684)
Adjusted net (loss) income $ (116,846) $ 147,533 $ (367,101) $ 524,564


Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss) (Dollars in thousands) (Unaudited):	Three Months Ended
	March 31, 2023		March 31, 2022
Net loss attributable to loanDepot, Inc.	$	(42,907)	$	(34,741)
Net loss from the pro forma conversion of Class C common shares to Class A common shares(1)	(48,814)		(56,577)
Net loss	(91,721)		(91,318)
Adjustments to the benefit for income taxes(2)	13,316		14,710
Tax-effected net loss	(78,405)		(76,608)
Change in fair value of servicing rights, net of hedging gains and losses(3)	18,289		1,295

Stock-based compensation expense	5,926		2,309

Gain on extinguishment of debt	—		(10,528)
Loss on disposal of fixed assets	261		—

Other (recovery) impairment	(345)		—
Tax effect of adjustments(4)	(5,973)		2,140
Adjusted net loss	$	(60,247)	$	(81,392)

(1)Reflects net ~~income (loss)~~loss to Class A common stock and Class D common stock from the pro forma exchange of Class C common stock.

(2)loanDepot, Inc. is subject to federal, state and local income taxes. Adjustments to income tax (benefit) reflect the effective income tax rates below, and the pro forma assumption that loanDepot, Inc. owns 100% of LD Holdings.

Three Months Ended Nine Months Ended
September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021
Statutory U.S. federal income tax rate 21.00 % 21.00 % 21.00 % 21.00 %
State and local income taxes (net of federal benefit) 5.00 5.43 5.00 5.43
Effective income tax rate 26.00 % 26.43 % 26.00 % 26.43 %


	Three Months Ended
	March 31, 2023		March 31, 2022
Statutory U.S. federal income tax rate	21.00	%	21.00	%
State and local income taxes (net of federal benefit)	6.28		5.00
Effective income tax rate	27.28	%	26.00	%

(3)Represents the change in the fair value of servicing rights attributable to changes in assumptions, net of hedging gains and losses.

(4)Amounts represent the income tax effect using the aforementioned effective income tax rates, excluding certain discrete tax items. Reporting periods after June 30, 2022 include the income tax effect of excess tax benefits or deficiencies on vested RSUs. Prior periods were adjusted to conform to current presentation.

5240


Reconciliation of Adjusted Diluted Weighted Average Shares Outstanding to Diluted Weighted Average Shares Outstanding (Dollars in thousands except per share) (Unaudited)	Reconciliation of Adjusted Diluted Weighted Average Shares Outstanding to Diluted Weighted Average Shares Outstanding (Dollars in thousands except per share) (Unaudited)	Three Months Ended				Nine Months Ended				Reconciliation of Adjusted Diluted Weighted Average Shares Outstanding to Diluted Weighted Average Shares Outstanding (Dollars in thousands except per share) (Unaudited)	Three Months Ended
		September 30, 2022		September 30, 2021		September 30, 2022		September 30, 2021			March 31, 2023		March 31, 2022
Net (loss) income attributable to loanDepot, Inc.		$	(60,081)	$	51,475	$	(195,750)	$	104,911
Adjusted net (loss) income		(116,846)		147,533		(367,101)		524,564
Net loss attributable to loanDepot, Inc.										Net loss attributable to loanDepot, Inc.	$	(42,907)	$	(34,741)
Adjusted net loss										Adjusted net loss	(60,247)		(81,392)

Share Data:	Share Data:									Share Data:
Diluted weighted average shares of Class A and Class D common stock outstanding	Diluted weighted average shares of Class A and Class D common stock outstanding	162,464,369		130,297,565		151,803,928		127,941,331		Diluted weighted average shares of Class A and Class D common stock outstanding	170,809,818		139,007,890
Assumed pro forma conversion of weighted average Class C shares to Class A common stock (1)	Assumed pro forma conversion of weighted average Class C shares to Class A common stock (1)	156,677,534		191,579,524		167,796,888		195,111,599		Assumed pro forma conversion of weighted average Class C shares to Class A common stock (1)	149,210,417		181,035,804
Adjusted diluted weighted average shares outstanding	Adjusted diluted weighted average shares outstanding	319,141,903		321,877,089		319,600,816		323,052,930		Adjusted diluted weighted average shares outstanding	320,020,235		320,043,694

Diluted (loss) earnings per share		$	(0.37)	$	0.40	$	(1.29)	$	0.82
Adjusted diluted (loss) earnings per share (2)		N/A		N/A		N/A		N/A
Diluted loss per share										Diluted loss per share	$	(0.25)	$	(0.25)
Adjusted diluted loss per share (2)										Adjusted diluted loss per share (2)	N/A		(0.25)

(1)Reflects the assumed pro forma conversion of all outstanding shares of Class C common stock to Class A common stock.

(2)Omitted adjusted diluted ~~(loss) earnings~~loss per share measures that included the impact of the assumed exchange of shares to the extent the exchange was antidilutive.

Reconciliation of Net Income (Loss) to Adjusted EBITDA (LBITDA)
(Dollars in thousands)
(Unaudited):
Three Months Ended Nine Months Ended
September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021
Net (loss) income $ (137,482) $ 154,277 $ (452,623) $ 608,414
Interest expense — non-funding debt(1)
36,138 22,823 83,671 57,261
Income tax (benefit) expense (23,451) 24,708 (63,274) 47,210
Depreciation and amortization 10,243 8,688 32,110 25,827
Change in fair value of servicing rights, net of hedging gains and
losses(2)
(24,529) 25,014 (58,601) (4,138)
Change in fair value - contingent consideration — (77) — (77)
Stock-based compensation expense and management fees 4,773 2,882 11,794 65,084
IPO expenses — (54) — 6,041
Loss on disposal of fixed assets 11,026 — 11,026 —
Goodwill impairment — — 40,736 —
Other impairment 9,149 — 15,112 —
Adjusted (LBITDA) EBITDA $ (114,133) $ 238,261 $ (380,049) $ 805,622


Reconciliation of Net Income (Loss) to Adjusted EBITDA (LBITDA) (Dollars in thousands) (Unaudited):	Three Months Ended
	March 31, 2023		March 31, 2022
Net loss	$	(91,721)	$	(91,318)
Interest expense — non-funding debt(1)	43,090		14,393
Income tax benefit	(14,862)		(11,627)
Depreciation and amortization	10,026		10,545
Change in fair value of servicing rights, net of hedging gains and losses(2)	18,289		1,295

Stock-based compensation expense	5,926		2,309

Loss on disposal of fixed assets	261		—

Other (recovery) impairment	(345)		—
Adjusted LBITDA	$	(29,336)	$	(74,403)

(1)Represents other interest expense, which includes gain on extinguishment of debt and amortization of debt issuance costs, in the Company’s consolidated statement of operations.

(2)Represents the change in the fair value of servicing rights attributable to changes in assumptions, net of hedging gains and losses.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

In the normal course of business, we are exposed to various risks which can affect our business, results and operations. The primary market risks to which we are exposed include interest rate risk, credit risk, prepayment risk and inflation risk.

We manage our interest rate risk and the price risk associated with changes in interest rates pursuant to the terms of an Interest Rate Risk Management Policy which (i) quantifies our interest rate risk exposure, (ii) lists the derivatives eligible for use as Hedging Instruments and (iii) establishes risk and liquidity tolerances.

Interest Rate Risk

Our principal market exposure is to interest rate risk as our business is subject to variability in results of operations due to fluctuations in interest rates. We anticipate that interest rates will remain our primary benchmark for market risk for the foreseeable future. Changes in interest rates affect our assets and liabilities measured at fair value, including LHFS, IRLCs, servicing rights and Hedging Instruments. In a declining interest rate environment, we ~~would~~ expect ~~our results of operations to be positively impacted by~~ higher loan origination volumes, ~~and~~higher loan ~~margins. However, we would expect our results of operations to be negatively impacted by higher actual and projected loan prepayments related to our loan servicing portfolio and a decrease~~margins, increases in the value of our ~~servicing rights. As interest rates decline, our~~ LHFS and IRLCs, ~~generally increase~~and decreases in the value ~~while~~of our Hedging Instruments ~~utilized to hedge against interest rate risk decrease in value.~~and servicing rights. In a rising interest rate environment, we ~~would~~ expect ~~a negative impact on the results of operations of our production activities and a positive impact on the results of operations of our servicing activities (principally through an increase~~lower loan origination volumes, lower loan margins, decreases in the ~~fair~~ value of ~~our servicing rights). As interest rates increase,~~ our LHFS and IRLCs, ~~generally decrease~~and increases in the value ~~while~~of our Hedging Instruments ~~typically increase in value.~~and servicing rights. The interaction between the results of operations of our various activities is a core component of our overall interest rate risk strategy.

IRLCs represent an agreement to extend credit to a potential customer, whereby the interest rate on the loan is set prior to funding. Our LHFS, which are held in inventory awaiting sale into the secondary market, and our IRLCs, are subject to changes in interest rates from the date of the commitment through the sale of the loan into the secondary market. Accordingly, we are exposed to interest rate risk and related price risk during the period from the date of the lock commitment through (i) the lock commitment cancellation or expiration date, or (ii) the date of sale into the secondary mortgage market. The average term for outstanding interest rate lock commitments at ~~September 30, 2022~~March 31, 2023 was 3938 days; and our average holding period of the loan from funding to sale was 2526 days for the ~~nine~~three months ended ~~September 30, 2022.~~March 31, 2023.

We manage the interest rate risk associated with our outstanding IRLCs, LHFS and servicing rights by entering into Hedging Instruments. Management expects these Hedging Instruments will experience changes in fair value opposite to changes in fair value of the IRLCs and LHFS, thereby reducing earnings volatility. We take into account various factors and strategies in determining the portion of IRLCs, LHFS, and servicing rights that we want to economically hedge. Our expectation of how many of our IRLCs will ultimately close is a key factor in determining the notional amount of Hedging Instruments used in hedging the position.

Credit Risk

We are subject to credit risk in connection with our loan sale transactions. While our contracts vary, we provide representations and warranties to purchasers and insurers of the mortgage loans sold that typically are in place for the life of the loan. In the event of a breach of these representations and warranties, we may be required to repurchase a mortgage loan or indemnify the purchaser, and any subsequent loss on the mortgage loan may be borne by us. The representations and warranties require adherence to applicable origination and underwriting guidelines (including those of Fannie Mae, Freddie Mac, and Ginnie Mae), including but not limited to the validity of the lien securing the loan, property eligibility, borrower credit, income and asset requirements, and compliance with applicable federal, state and local law.

We record a provision for losses relating to such representations and warranties as part of our loan sale transactions. The level of the liability for losses from representations and warranties is difficult to estimate and requires considerable management judgment. The level of loan repurchase losses is dependent on economic factors, trends in property values, investor repurchase demand strategies, and other external conditions that may change over the lives of the underlying loans. We evaluate the

adequacy of our liability for losses from representations and warranties based on our loss experience and our assessment of incurred losses relating to loans that we have previously sold and which remain outstanding at the balance sheet date. As our portfolio of loans sold subject to representations and warranties grows and as economic fundamentals change, such adjustments can be material. However, we believe that our current estimates adequately approximate the losses incurred on our sold loans subject to such representations and warranties.

Additionally, we are exposed to credit risk associated with our borrowers, counterparties, and other significant vendors. Our ability to operate profitably is dependent on both our access to capital to finance our assets and our ability to profitably originate, sell, and service loans. Our ability to hold loans pending sale and/or securitization depends, in part, on the availability to us of adequate financing lines of credit at suitable interest rates and favorable advance rates. In general, we manage such risk by selecting only counterparties that we believe to be financially strong, dispersing the risk among multiple counterparties, placing contractual limits on the amount of unsecured credit extended to any single counterparty and entering into netting

agreements with the counterparties, as appropriate. During the ~~nine~~three months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021,~~ we incurred no losses due to nonperformance by any of our counterparties.

Prepayment Risk

Prepayment risk is affected by interest rates (and their inherent risk) and borrowers’ actions relative to their underlying loans. To the extent that the actual prepayment speed on the loans underlying our servicing rights differs from what we projected when we initially recognized them and when we measured fair value as of the end of each reporting period, the carrying value of our investment in servicing rights will be affected. In general, an increase in prepayment expectations will decrease our estimates of the fair value of the servicing right, thereby reducing expected servicing income. We monitor the servicing portfolio to identify potential refinancings and the impact that would have on associated servicing rights.

~~Inflation Risk~~

Almost all of our assets and liabilities are interest rate sensitive in nature. As a result, interest rates and other factors will influence our performance more than inflation. Changes in interest rates do not necessarily correlate with inflation rates or changes in inflation rates. Additionally, our financial statements are prepared in accordance with GAAP and our activities and balance sheets are measured with reference to historical cost and/or fair value without considering inflation.

5543

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our CEO and CFO, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), as of the end of the period covered by this Form 10-Q. Based on such evaluation, our CEO and CFO have concluded that as of ~~September 30, 2022,~~March 31, 2023, our disclosure controls and procedures are designed at a reasonable assurance level and are effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to our management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act during the period covered by this Form 10-Q that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on Effectiveness of Controls and Procedures

In designing and evaluating the disclosure controls and procedures and internal control over financial reporting, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we and certain of our subsidiaries are involved in various lawsuits in state or federal courts regarding violations of state or federal statutes, regulations or common law related to matters arising out of the ordinary course of business. For a further discussion of our material legal proceedings, see Note 1514 - Commitments and Contingencies of the Notes to Consolidated Financial Statements included in “Item 1 Financial Statements.” Additionally, below we have described certain other significant legal proceedings.

Securities Class Action Litigation

Beginning in September 2021, two putative class action lawsuits were filed in the United States District Court for the Central District of California asserting claims under the U.S. securities laws against the Company, certain of its directors, and certain of its officers regarding certain disclosures made in connection with the Company’s IPO. The two actions were consolidated ~~and the court appointed a lead plaintiff~~ in May 2022. A consolidated amended complaint was filed in June 2022, which, in addition to challenging disclosures made in connection with the IPO, alleges that certain disclosures made after the IPO were false and/or misleading. The Company’s motion to dismiss was filed on August 24, 2022. On ~~October 11, 2022, plaintiffs filed an opposition to~~January 24, 2023, the Court granted, in part, and denied, in part, the Company’s motion to dismiss. The Company’s ~~reply is due~~answer to the consolidated amended complaint was filed on ~~November 10, 2022.~~March 3, 2023. The plaintiffs seek unspecified monetary damages. The Company believes this lawsuit is without merit and intends to vigorously defend against it. The Company does not believe that a loss is probable or that the amount of loss is reasonably estimable in this matter at this time.

Stockholder Derivative Litigation

Beginning in October 2021, four shareholder derivative complaints were filed in the United States District Court for the Central District of California against certain of the Company’s directors and officers, alleging, among things, that these defendants breached their fiduciary duties by causing the Company to make the disclosures being challenged in the putative securities class action described above and seeking unspecified monetary damages for the

Company and that the Company make certain changes to its corporate governance. These derivative actions

subsequently were consolidated into a single action (the “California Action”). The California Action currently is stayed pending resolution of a forthcoming motion ~~to dismiss~~for summary judgment in the putative securities class action. Beginning in March 2022, two substantially similar shareholder derivative complaints were filed in the United States District Court for the District of Delaware, and then were consolidated into a single action (the “Delaware Action”). The Delaware Action currently is stayed pending resolution of a forthcoming motion ~~to dismiss~~for summary judgment in the putative securities class action. The Company believes these lawsuits are without merit. The Company does not believe that a loss is probable or that the amount of loss is reasonably estimable in this matter at this time.

Item 1A. Risk Factors

~~Other than the risk factor set forth below, there~~There have been no material changes in the risk factors discussed under Part I. "Item 1A. Risk Factors" of our ~~2021~~2022 Form 10-K filed with the SEC on March ~~18, 2022.~~

Macroeconomic headwinds, including inflation and higher interest rates, have negatively impacted our operations and financial results and may further negatively impact us. While we are implementing initiatives such as our Vision 2025 plan to better position the Company, these initiatives may not effectively mitigate the effects of deterioration in the macroeconomic environment.

Our operations and financial performance are affected by factors including macroeconomic conditions such as inflation fluctuations, interest rates, consumer confidence and demand. We generate a sizeable portion of our revenues from refinance and purchase mortgages. As interest rates have risen, refinancing volumes have decreased as fewer consumers were incentivized to refinance their mortgages. As a result, our revenues have decreased substantially and we experienced net losses for the nine months ended September 30, 2022. In addition, investors may seek to have us repurchase additional loans in the current environment, and because repurchased loans are typically resold at a discount to their repurchase price and unpaid principal balance we have experienced increased losses on repurchased loans or loans subject to repurchase originated at interest rates lower than currently prevailing rates. An increase in repurchase volumes of loans originated at lower interest rates could materially adversely affect our business, financial condition and results of operations.

As a result of our third quarter losses, we were required to amend certain of our warehouse lines and debt obligations related to profitability covenants for the quarter and we expect that we will need to execute additional amendments from certain of our lending counterparties related to our profitability covenants or other similar financial covenants in the future, including for the fourth quarter. There can be no assurance that such amendments will be received, in which case we would be in default under these agreements, and our lenders could elect to declare outstanding amounts due and payable, terminate their commitments, require the posting of additional collateral and enforce their interests against existing collateral, as well as triggering cross default provisions under other financing facilities which could materially adversely affect our financial condition and results of operations.

In July 2022, we announced our Vision 2025 plan designed to address current and anticipated mortgage market conditions by reducing staffing levels to approximately 6,500 by year-end 2022 and implementing business process optimization and other cost saving measures. We may not realize, in full or in part, the anticipated benefits, savings and improvements in our operations from our restructuring efforts due to unforeseen difficulties, delays or unexpected costs. If we are unable to realize the expected operational efficiencies and cost savings through headcount reduction, attrition, business process optimization, reduced marketing and third-party spending, and real estate consolidation, our operating results, financial condition, cash flows and competitive position may be materially adversely affected. We also cannot guarantee that we will not have to undertake additional staffing reductions or strategic reorganization activities in the future.

Furthermore, staffing reductions that occurred over the last several months could create an additional risk of claims being made on behalf of affected employees. Any alleged violation of applicable wage laws or other labor-or employment-related laws could result in complaints by current or former employees, adverse media coverage, investigations and damages or penalties which could have a materially adverse effect on our reputation, business, operating results and prospects. In addition, responding to any such proceeding may result in a significant diversion of management’s attention and resources, significant defense costs and other professional fees.

Finally, we may be exposed to unanticipated consequences of our staffing reductions, including attrition beyond the planned reductions, increased difficulties in our day-to-day operations, including as a result of a loss of continuity, loss of accumulated knowledge and/or efficiency, reduced employee morale and reduced ability to attract and retain qualified personnel.Employees who were not affected by our planned staffing reductions may seek alternate employment, which may force us to rely on third-party contract support creating unplanned additional expense or harm our productivity.16, 2023.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Shares of the Company's Class B common stock or Class C common stock may each be converted, together with a corresponding ~~Holding~~Holdco Unit, as applicable, at any time and from time to time at the option of the holder of such share of Class B common stock or Class C common stock, as applicable, for one fully paid and non-assessable share of Class A common stock. Each share of the Company’s Class D common stock may be converted into one fully paid and non-assessable share of Class A common stock at any time at the option of the holder of such share of Class D common stock. There is no cash or other consideration paid by the holder converting such shares and, accordingly, there is no cash or other consideration received by the Company. The shares of Class A common stock issued by the Company in such conversions are exempt from registration pursuant to Section 3(a)(9) of the Securities Act.

On ~~July 1, 2022,~~January 3, 2023, we issued to stockholders ~~455,797~~391,186 shares of Class A common stock upon the conversion of the same number of shares of our Class C common stock and corresponding ~~Holding~~Holdco Units held by such stockholders.

On ~~August~~February 1, ~~2022,~~2023, we issued to stockholders ~~97,344~~613,801 shares of Class A common stock upon the conversion of the same number of shares of our Class C common stock and corresponding ~~Holding~~Holdco Units held by such stockholders.

On ~~September~~March 1, ~~2022,~~2023, we issued to stockholders ~~3,520,288~~550,883 shares of Class A common stock upon the conversion of the same number of shares of our Class C common stock and corresponding ~~Holding~~Holdco Units held by such stockholders.

On October 1, 2022, we issued to stockholders 2,420,231 shares of Class A common stock upon the conversion of the same number of shares of our Class C common stock and corresponding Holding Units held by such stockholders.

~~In July 2022, 56,872 shares were purchased from employees to pay for taxes related to restricted stock vesting under the terms of an employee share-based compensation plan.~~

~~In August 2022, 23,146 shares were purchased from employees to pay for taxes related to restricted stock vesting under the terms of an employee share-based compensation plan.~~

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

Item 6. Exhibits

The following documents are filed as a part of this report:


Exhibit No.			Description
3.1			Amended and Restated Certificate of Incorporation of loanDepot, Inc., dated February 11, 2021(incorporated herein by reference to exhibit 3.1 to the Company’s Current Report on Form 8-K filed on February 16, 2021).
3.2			Amended and Restated Bylaws of loanDepot, Inc., ~~dated February 11, 2021~~effective November 10, 2022 (incorporated herein by reference to ~~exhibit 3.2~~Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on ~~February 16, 2021).~~
~~10.1~~			~~loanDepot 2021 Omnibus Incentive Plan (as amended by the First Amendment)~~
~~10.2~~			~~loanDepot~~ ~~2022 Inducement Plan (incorporated herein by reference to Exhibit 10.4 of the Company’s Current Report on Form 8-K filed April 26,~~November 15, 2022).
~~10.3~~10.1*+			~~Form of Restricted Stock Unit Agreement~~Seventh Amendment dated March 30, 2023, to ~~loanDepot 2022 Inducement Plan~~
~~10.4~~			~~Form of Performance Stock Unit Agreement to loanDepot 2022 Inducement Plan~~
~~10.5~~			~~Form of Option Agreement to loanDepot 2022 Inducement Plan~~
~~10.6~~			~~loanDepot, Inc. 2022 Employee Stock Purchase Plan incorporated herein by reference to Exhibit 99.3 to the Company’s Registration Statement on Form S-8 on May 20, 2022).~~
~~10.7~~			~~Amendment No. 2, dated July 26, 2022, by and between Bank of America, N.A. and loanDepot.com, LLC to the Second Amended and Restated Mortgage Loan Purchase Agreement, dated as of February 2, 2022~~
~~10.8~~			~~Amendment No. 4, dated July 26, 2022, by and among Bank of America, N.A., loanDepot BA Warehouse, LLC and loanDepot.com, LLC to the Second~~ Amended and Restated Master Repurchase ~~Agreement, dated as of August 20, 2021.~~
~~10.9~~			Amendment No. 2, dated as of July 28, 2022, by and between UBS AG, by and through its branch office at 1285 Avenue of Americas and loanDepot.com, LLC to the Amended and Restated Master Repurchase Agreement.
~~10.10~~			Amendment No. 2 to the Second Amended and Restated Master Repurchase Agreement dated as of August 31, 2022, by and among loanDepot.com, LLC, as seller, Credit Suisse First Boston Mortgage Capital LLC, as administrative agent, and Credit Suisse AG, Cayman Islands Branch, as buyer.
~~10.11~~			~~First Amended and Restated Master Repurchase Agreement, dated September 30, 2022, by and between loanDepot.com, LLC and JPMorgan Chase Bank, N. A.~~
~~10.12~~			~~Amendment No. 10 to the Mortgage Loan Participation Sale Agreement, dated October 10, 2022, by and between loanDepot.com, LLC and JPMorgan Chase Bank, N. A.~~
10.13*			~~Amendment No. 3, dated September 26, 2022, by and between Bank of America, N.A. and loanDepot.com, LLC to the Second Amended and Restated Mortgage Loan Purchase Agreement, dated as of February 2, 2022~~
~~10.14*+~~			~~Third Amendment dated August 12, 2022, to Amended and Restated Master Purchase~~ Agreement, dated as of November 15, 2021, by and among TIAA, FSB, formerly known as EverBank, as administrative agent for the Buyers and as a buyer, Flagstar Bank, N.A., as purchaser of the rights and obligations hereunder from Signature Bridge Bank, N.A., as successor in interest to Signature Bank, as a buyer, and loanDepot.com LLC, as the ~~seller~~seller.
10.15*			~~Amendment No. 5, dated September 26, 2022, by and between Bank of America, N.A. and loanDepot.com, LLC to the Second Amended and Restated~~ ~~Master Repurchase Agreement, dated as of February 2, 2022~~
~~10.16*+~~			~~Amendment Number 3 dated September 19, 2022, to Master Repurchase Agreement and Securities Contract between Bank of Montreal and loanDepot.com, LLC~~
~~10.17*+~~			Fourth Amendment dated September 28, 2022, to Amended and Restated Master Purchase Agreement, dated as of November 15, 2021, by and among TIAA, FSB, formerly known as EverBank, as administrative agent for the Buyers and as a buyer, Signature Bank, as a buyer, and loanDepot.com, LLC, as the seller
~~10.18~~			~~Third Amended and Restated Master Purchase Agreement dated October 28, 2022, by and between Jefferies Funding LLC, as buyer, and loanDepot.com, LLC, as seller~~


~~Exhibit No.~~			~~Description~~
~~10.19*+~~10.2+			Omnibus Assignment, Assumption, and Amendment, ~~No. 10,~~ dated ~~October 31, 2022,~~March 16, 2023, by and among Credit Suisse First Boston Mortgage Capital LLC, Credit Suisse AG, a company incorporated in Switzerland, acting through its Cayman ~~Island~~Islands Branch, Alpine Securitization LTD., Atlas Securitized Products, L.P., Atlas Securitized Products Investments 3, L.P., Atlas Securitized Products Funding 2, L.P., Nexera Holding LLC, and loanDepot.com, LLC to the Master Repurchase Agreement, dated as of March 10, ~~2017.~~2017, the Amended and Restated Pricing Side Letter, dated as of May 21, 2021, the Repo Administration and Allocation Agreement, dated as of March 10, 2017, and the Repurchase Agreement and Pricing Side Letter (incorporated herein by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed March 22, 2023).
10.3+			Joint Omnibus Assignment, Assumption and Amendment No. 3 to the Series 2017-VF1 Repurchase Agreement, Amendment No.2 to the Series 2021-SAVF1 Repurchase Agreement, Amendment No. 1 to the Series 2021-PIAVF1 Repurchase Agreement, Amendment No. 4 to the Series 2017-VF1 Pricing Side Letter, Amendment No.2 to the Series 2021-SAVF1 Pricing Side Letter and the Series 2021-PIAVF1 Pricing Side Letter (incorporated herein by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed March 22, 2023).
10.4			Settlement and Cooperation Agreement, dated as of April 4, 2023, by and among loanDepot, Inc., Anthony Hsieh, The JLSSAA Trust, established September 4, 2014, JLSA, LLC, Trilogy Mortgage Holdings, Inc., Trilogy Management Investors Six, LLC, Trilogy Management Investors Seven, LLC and Trilogy Management Investors Eight, LLC (incorporated herein by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed April 5, 2023).
10.5			Settlement Agreement and Release, dated as of April 4, 2023, by and between loanDepot, Inc. and Anthony Hsieh (incorporated herein by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed April 5, 2023).
~~10.20*+~~10.6+			Seventeenth Amendment to Credit and Security Agreement, dated as of April 13, 2023, between loanDepot.com, LLC and NexBank (incorporated herein by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed April 19, 2023).
10.7+			Amendment ~~No.~~ ~~4 dated November 7, 2022,~~Number Two to ~~Master Repurchase Agreement~~Credit and ~~Securities Contract between Bank of Montreal and loanDepot.com, LLC~~
~~10.21*+~~			~~Fifth Amendment dated November 8, 2022, to Amended and Restated Master Purchase~~Security Agreement, dated as of ~~November 15, 2021, by and among TIAA, FSB, formerly known as EverBank, as administrative agent for the Buyers and as a buyer, Signature Bank, as a buyer, and~~April 13, 2023, between loanDepot.com, LLC asand Flagstar Bank, National Association (incorporated herein by reference to Exhibit 10.2 of the ~~seller~~Company’s Current Report on Form 8-K filed April 19, 2023).
31.1*			Section 302 Certification of Principal Executive Officer.
31.2*			Section 302 Certification of Principal Financial Officer.
32.1*			Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*			Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.0			Inline XBRL Document
101.INS			Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH			Inline XBRL Taxonomy Extension Schema Document.
101.CAL			Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF			Inline XBRL Taxonomy Extension Definition Linkbase Document.


Exhibit No.			Description
101.LAB			Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE			Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104.0			Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

* Filed herewith

** Furnished herewith

+ Confidential information has been omitted because it is both (i) not material and (ii) ~~would be competitively harmful if publicly disclosed~~is the type of information that the Company treats as private or confidential pursuant to Item 601(b)(10) of Regulation S-K. Certain schedules, exhibits and similar attachments have been omitted pursuant to Item 601(a)(5) of Regulation S-K or constitutes a clearly unwarranted invasion of personal privacy pursuant to Item 601(a)(6) of Regulation S-K. A copy of any omitted schedule or exhibit will be furnished supplementally to the staff of the Securities and Exchange Commission upon request.

6047

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	LOANDEPOT, INC.


Dated: ~~November 9, 2022~~May 10, 2023	By:	/s/ Frank Martell
	Name:	Frank Martell
	Title:	President and Chief Executive Officer

Dated: ~~November 9, 2022~~May 10, 2023	By:	/s/ Patrick Flanagan
	Name:	Patrick Flanagan
	Title:	Chief Financial Officer

6148


	Common stock outstanding		Common stock $			Treasury Stock			Additional paid-in capital		Retained Deficit			Non-controlling Interests		Total Equity
	Class A	Class C	Class D	Class A				Class C					Class D
Balance at December 31, 2020	—	—	—	$	—	$	—		$	—	$	—		$	—	$	—	$	1,656,613	$	1,656,613
Distributions prior to the Reorganization	—	—	—	—		—			—		—			—		—		(160,617)		(160,617)
Equity compensation prior to the Reorganization	—	—	—	—		—			—		—			—		—		338		338
Net income prior to the Reorganization	—	—	—	—		—			—		—			—		—		294,598		294,598
Deferred taxes and other tax adjustments associated with the Reorganization and IPO	—	—	—	—		—			—		—			(201,653)		—		—		(201,653)
Effect of the Reorganization	2,215,687	181,789,329	121,368,600	2		182			121		—			740,629		—		(740,934)		—
Effect of the IPO	3,850,000	(2,394,000)	(1,456,000)	4		(2)			(2)		—			—		—		—		—
Effect of the Greenshoe	577,500	(359,100)	(218,400)	1		(1)			—		—			—		—		—		—
Net issuance of common stock under stock-based compensation plans	11,341,027	(3,367,587)	(4,715,556)	13		(3)			(4)		(12,844)			(6)		—		—		(12,844)
Dividends to Class A and Class D shareholders ($0.77 per share)	—	—	—	—		—			—		—			—		(40,730)		(58,033)		(98,763)
Distributions to Class C shareholders	—	—	—	—		—			—		—			—		(63,023)		(89,885)		(152,908)
Stock-based compensation	—		—	—		—			—		—			26,505		—		37,506		64,011
Distributions for taxes on behalf of shareholders, net	—		—	—		—			—		—			—		(18,977)		(25,450)		(44,427)
Net income subsequent to the Reorganization and IPO	—		—	—		—			—		—			—		104,911		208,905		313,816
Balance at September 30, 2021	17,984,214	175,668,642	114,978,644	$	20	$	176		$	115	$	(12,844)		$	565,475	$	(17,819)	$	1,123,041	$	1,658,164

Balance at December 31, 2021	36,466,936	172,729,168	100,822,084	$	38	$	173		$	101	$	(12,852)		$	565,073	$	(28,976)	$	1,105,803	$	1,629,360
Deferred taxes and other tax adjustments related to conversions and exchanges	—	—	—	—		—			—		—			(19,835)		—		—		(19,835)
Net issuance of common stock under stock-based compensation plans	31,509,131	(23,598,630)	(3,795,413)	32		(24)			(4)		(373)			227,013		—		(227,017)		(373)
Dividends to Class A and Class D shareholders ($0.08 per share)	—	—	—	—		—			—		—			—		(5,343)		(6,481)		(11,824)
Distributions to Class C shareholders	—	—	—	—		—			—		—			—		(6,199)		(7,471)		(13,670)
Stock-based compensation	—	—	—	—		—			—		—			5,848		—		5,946		11,794
Distributions for taxes on behalf of shareholders, net	—	—	—	—		—			—		—			—		(29,299)		(35,033)		(64,332)
Net loss	—	—	—	—		—			—		—			—		(195,750)		(256,873)		(452,623)
Balance at September 30, 2022	67,976,067	149,130,538	97,026,671	$	70	$	149		$	97	$	(13,225)		$	778,099	$	(265,567)	$	578,874	$	1,078,497


	September 30, 2022
	Recurring Fair Value Measurements of Assets and Liabilities Using:
	Quoted Market Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value Measurements
Fair value through net income:
Assets:
Loans held for sale	$	—	$	2,692,820	$	—	$	2,692,820
Trading securities	—		97,210		—		97,210
Derivative assets:
Interest rate lock commitments	—		—		20,910		20,910
Forward sale contracts	—		295,737		—		295,737


Servicing rights	—		—		2,030,026		2,030,026
Total assets at fair value	$	—	$	3,085,767	$	2,050,936	$	5,136,703
Liabilities:
Derivative liabilities:
Interest rate lock commitments	$	—	$	—	$	85,628	$	85,628
Interest rate swap futures	19,480		—		—		19,480
Forward sale contracts	—		38,086		—		38,086
Put options on treasuries	6,643		—		—		6,643

Servicing rights	—		—		16,757		16,757
Total liabilities at fair value	$	26,123	$	38,086	$	102,385	$	166,594


	Three Months Ended September 30, 2022				Nine Months Ended September 30, 2022
	IRLCs, net (1)		Servicing Rights, net(2)		IRLCs, net (1)		Servicing Rights, net(3)


Total net (losses) gains included in earnings	$	(122,323)	$	140,598	$	(245,338)	$	765,143

Change in unrealized (losses) gains relating to assets and liabilities still held at period end	$	(64,718)	$	150,534	$	(64,718)	$	683,413


	September 30, 2022		December 31, 2021
Current loans	$	137,990,039	$	160,302,966
Loans 30 - 89 days delinquent	572,209		504,467
Loans 90 or more days delinquent or in foreclosure	1,147,385		1,305,532
Total servicing portfolio (1)	$	139,709,633	$	162,112,965


	Goodwill		Other intangible assets		Total
Balance, December 31, 2021	$	40,736	$	1,581	$	42,317
Amortization	—		(205)		(205)
Impairment loss	(40,736)		(1,376)		(42,112)
Balance, September 30, 2022	$	—	$	—	$	—


	September 30, 2022		December 31, 2021
Amounts (payable) receivable from joint ventures	$	(8,136)	$	1,855